Preamble

The House—after the Adjournment on 7th December, 1951, for the Christmas Recess—met at Half-past Two o'Clock.

PRAYERS

[MR. SPEAKER in the Chair]

NEW WRITS

Mr. SPEAKER acquainted the House that he had issued, during the Adjournment, Warrants for new Writs, namely—

For Southport, in the room of the Right honourable Robert Spear Hudson, C.H., called up to the House of Peers;

For Bournemouth, East and Christ-church, in the room of the Right honourable Brendan Bracken, called up to the House of Peers;

For Leeds, South East, in the room of Major the Right honourable James Milner, M.C., T.D., called up to the House of Peers.

Oral Answers to Questions — EMPLOYMENT

Re-armament and Essential Industries

Mr. Stephen Swingler: asked the Minister of Labour whether he will make a statement on the Government's policy for manning of essential industries.

Mr. Norman Dodds: asked the Minister of Labour what proposals he has to retain existing labour in the essential industries and obtain the labour force for the re-armament programme.

The Minister of Labour (Sir Walter Monckton): I would ask the hon. Members to await the statement of the Government's proposals to deal with the economic situation which will be made by my right hon. Friend the Chancellor of the Exchequer.

Mr. Swingler: asked the Minister of Labour what numbers of persons he estimates will be required to change their occupations in order to provide sufficient labour for the re-armament programme.

Sir W. Monckton: I regret that it is not practicable to make such an estimate.

Mr. Swingler: In view of the fact that the Minister has made a number of statements in speeches in the country giving estimates of the numbers required to change their occupations, would he state from what industries he proposes to draw these respective munition workers?

Sir W. Monckton: The difficulty about making an estimate of those who will have to change their occupation is that some people will be doing precisely the same job with the same employer in the same works, but it will be a defence job; some will be under the same employer still doing the same thing in another part of the factory, and some will move altogether from that employment to another employment that will still be in the same occupation. That is the difficulty about the estimate.

Mr. Desmond Donnelly: Is the Minister really saying that he has no idea how many will be required?

Sir W. Monckton: No, Sir.

Coalmining (Italian Workers)

Mr. R. J. Taylor: asked the Minister of Labour what means he proposes to employ to retain in mining employment those foreign workers who are recruited for this purpose; and if he will make a statement.

Sir W. Monckton: I presume the hon. Member is referring to those Italian workers who have been brought to this country under the official coalmining recruitment scheme. One of the conditions on which these workers are allowed to stay in this country is that they do not leave coalmining employment without the consent of my Department.

Mr. S. S. Awbery: Will the Minister take steps to repudiate statements which have been made to the effect that these men are undesirable?

Sir W. Monckton: They are certainly not undesirable, and I sincerely hope more of them will be able to go into the mines.

Textiles and Clothing

Mr. Dodds: asked the Minister of Labour how many men and women were registered as unemployed in the textile trades at the last convenient date; and what is being done to find suitable alternative employment for those concerned.

Mr. Leslie Hale: asked the Minister of Labour whether he is aware of the increasing unemployment in the textile and clothing industry; and what steps he proposes to take.

Sir W. Monckton: The latest date for which figures are available is 10th December. At that date 7,379 males and 17,667 females were registered as unemployed in the textile trades, and there were 6,294 males and 17,006 females unemployed in the clothing trades. The majority of these workers were temporarily stopped and hoped to return shortly to their previous employment. The employment exchange service is available to help those seeking alternative employment.

Mr. Dodds: Does the Minister think that this is a temporary phase of recession

in the textile industry, or is he of the opinion that those who have lost their work would be well advised to look for employment in some other channel?

Sir W. Monckton: My reference to the temporary phase was due to the fact that in early December a number were temporarily stopped in their employment in relation to the extended Christmas holiday arrangements. There has since been a considerable resumption of work so far as those people are concerned. I would not like to venture a prophecy as to how far the textile industry is going to prosper or fail. On that matter I do not want to anticipate what will be said this afternoon by my right hon. Friend the Chancellor of the Exchequer.

Air Commodore A. V. Harvey: Is my right hon. and learned Friend aware that in some parts of the country like Macclesfield unemployment is worse since December, and is he further aware that this position commenced last June? Will he try and persuade his right hon. Friend the Minister of Supply to divert new factories, particularly those connected with the arms industry, into these areas?

Sir W. Monckton: I am well aware that unemployment has gone up at different periods to a different extent in different parts of the country. I cannot give a general answer as to recession and I do not want to enter a general debate on the matter in anticipation of my right hon. Friend the Chancellor.

Mr. Speaker: Mr. Brockway.

Mr. Hale: On a point of order, Sir. The right hon. and learned Gentleman begged leave of the House to answer Questions Nos. 5 and 9 together. I did not protest though Question No. 5 refers to textile trades and Question No. 9 to the textile and clothing industry. I have been rising each time and have not been successful in asking a supplementary question on my own Question.

Mr. Speaker: I am sorry I did not see the hon. Member when he rose. I was looking for him in his usual place.

Mr. Hale: May I therefore, Sir, ask if I might be permitted to put a supplementary question affecting my division? The reason why I am not in my usual place is that somebody had pinched it before I got here.

Mr. Speaker: I am very sorry. It is my fault that I did not observe the hon. Member, but I am afraid we have passed the Question now and that by the Rules of Order we cannot go back.

Mr. Hale: With respect, Sir, there are many precedents for the Chair being good enough in such circumstances to permit an important supplementary question being put.

Mr. Speaker: I am sorry but I cannot. I have gone past that Question.

Young Persons

Major Guy Lloyd: asked the Minister of Labour whether the assessment of young peoples' capacities and suitability for various grades of employment made by the officials of Youth Employment committees are available to parents on request.

Sir W. Monckton: There is no formal assessment of this kind which could be made available to parents, but Youth Employment officers are always ready to discuss with parents the capacity and suitability of a young person for various kinds of employment.

Major Lloyd: Is my right hon. and learned Friend aware that there is a certain amount of indignation among parents who appear to think their rights and interests in these matters are being ignored by some of his officials? Will he give instructions to his officials to take cognisance of that fact?

Sir W. Monckton: I do not think it would be a good thing to compel Youth Employment officers to keep more than notes of their interviews. They do not make a formal assessment. As long as they are prepared to deal with parents and tell them the results those notes display I should have thought that would be enough.

Scottish Hotel Industry (Wages Board)

Major W. J. Anstruther-Gray: asked the Minister of Labour whether he is prepared to consider the establishment of a separate wages board for the Scottish hotel industry in view of the recommendations of the Tourist Board.

Sir W. Monckton: I cannot vary the wages board machinery except upon a

recommendation under the Act by the Catering Wages Commission. The Commission have been considering the question of a separate board for Scotland, but it has now emerged that legally the Commission are unable to recommend the establishment of a new wages board if the workers concerned are already included in the scope of existing boards. I am considering the situation thus disclosed.

Major Anstruther-Gray: May we take it from that reply that my right hon. and learned Friend does not definitely close the door to some progress in this direction?

Sir W. Monckton: I do not intend to close any doors in connection with this matter. I have been in close touch with both sides of this industry, and I am encouraged to hope that we shall be able to produce something constructive. I do not want to say more about it.

Mr. A. Woodburn: Is the right hon. and learned Gentleman keeping in mind that the problem is not so much one between Scotland and England as one between isolated hotels and city hotels?

Sir W. Monckton: I have what the right hon. Gentleman mentions very much in my mind.

Aberdeen

Mr. Hector Hughes: asked the Minister of Labour how many men and women, respectively, are now unemployed in the city of Aberdeen and in what trades; and what were the respective figures for the corresponding periods in each of the last six years.

Sir W. Monckton: I am having the available information extracted and will write to the hon. and learned Member.

Mr. Hughes: Is the right hon. and learned Gentleman aware that there is increasing unemployment in the shipbuilding and engineering trades in the North-East of Scotland? What is he doing to maintain full employment in these trades, both of which are essential in peace as well as in war?

Sir W. Monckton: I am well aware that there is unemployment there. I am anxious to get materials and when I get them I will see what special steps if any ought to be taken.

Mr. Hale: Is the right hon. and learned Gentleman aware that there is a very great deal of unemployment in Oldham and in Lancashire and that there is very great concern about the situation in Lancashire, especially in the textile industry? Is he aware that that concern is aggravated by the possibility of the Chinese market being closed to the textile industry, and that it is made worse by the fact that in the armament industry there are 90 per cent. of people in some factories being paid wages for doing no work?

Sir W. Monckton: I will bear in mind what the hon. Member said when I reconsider the earlier Question.

Building Workers (Call-up)

Mr. Emrys Hughes: asked the Minister of Labour how many building trade workers were called up for military service in 1951; what is his estimate of the number of building workers in the Forces; and the number now employed on work for the Army, Royal Navy and Royal Air Force.

Sir W. Monckton: I regret that the information is not immediately available, but I am having inquiries made and will communicate with the hon. Member as soon as possible.

Mr. Hughes: When the right hon. and learned Gentleman is making his inquiries, will he also consider the question of keeping the building workers on jobs so that they will be able to get on with the programme of 300,000 houses?

Aircraft Apprentices (Call-up)

Mr. William A. Steward: asked the Minister of Labour if he is aware that the call-up of skilled aircraft apprentices is retarding the production of aircraft for the re-armament programme; and if he will exempt these skilled workers, in view of the delays caused to production.

Sir W. Monckton: This suggestion is already under examination.

Mr. Steward: Does the Minister fully appreciate that these apprentices are being called up just as they are becoming of real value to the firms by whom they are employed, and that this must have a detrimental effect on the output of aircraft in the re-armament programme?

Sir W. Monckton: I am aware of that, Sir.

Mr. Ellis Smith: Is the right hon. and learned Gentleman aware that the representative organisations in industry are very concerned about this, and will he bear in mind that if exemption is to be granted in one section of industry it should be applied to others?

Sir W. Monckton: The hon. Gentleman is putting one of the points which are to be examined.

Wages and Cost of Living

Sir Waldron Smithers: asked the Minister of Labour the increase in wages since 1st January, 1948, giving details of the industries mainly affected; what was the total rise; and to what extent does this rise compare with the rise in the cost of living.

Sir W. Monckton: Between 31st December, 1947, and 31st December, 1951, the index number measuring the movement in weekly full-time rates of wages of wage-earners rose from 103 to 126. Between 16th December, 1947, and 11th December, 1951, the interim index of retail prices rose from 104 to 130. The remaining information asked for, so far as it is available, will take some time to extract, and I will send it to my hon. Friend when it is ready.

Sir W. Smithers: In view of the fact that so many of our people are financially and economically uninstructed will my right hon. and learned Friend issue an authoritative statement to the effect that an increase in wages without increased production does no good to the recipient or to the country, and in those conditions the recipients are only being paid in pieces of paper which one cannot eat or wear and which are going down and down in purchasing value every day?

Sir W. Monckton: I shall do my best to increase productivity wherever I can.

Sir W. Smithers: Tell them the truth.

Oral Answers to Questions — NATIONAL SERVICE (PROSECUTIONS)

Mr. A. Fenner Brockway: asked the Minister of Labour on how many occasions have Bernard Bennett, Edward Andrews, Dennis Watts and Peter Newell


been sentenced for refusing medical examination or military service under the National Service Acts.

Sir W. Monckton: Bennett and Andrews three times; Watts and Newell twice.

Mr. Brockway: In view of the undertakings given during the passage of the Bill against cat and mouse treatment, may I ask whether the right hon. and learned Gentleman will look into the uncompleted sentences and, in particular, liberate Bernard Bennett from imprisonment—on his third sentence?

Sir W. Monckton: There has been no change in the practice which has been in operation for a number of years. That was announced in this House by the then Parliamentary Secretary in May, 1947, when he said:
… no man is prosecuted after he has served a prison sentence or sentences amounting to three months or more, and … furthermore … a man is not prosecuted more than twice even if these two prosecutions have resulted in prison sentences of less than three months, except where the sentences are derisory, for instance, small fines."—[OFFICIAL REPORT, 21st May, 1947; Vol. 437, c. 2421.]

Mr. Brockway: Has the right hon. and learned Gentleman's attention been drawn to the fact that Bennett has been sentenced three times and is now in prison?

Sir W. Monckton: Bennett has been sentenced twice to a fine and once to imprisonment. I must draw attention to this, that if fines of a moderate kind twice administered are enough one must remember that his case has been heard by the local tribunal and the appeal tribunal and has been rejected and that what he would be avoiding by these small fines, if they were treated as enough, is two years' Service and three and a half years' in Reserve.

Mr. Brockway: May I give notice that I will raise this matter on an early Adjournment?

Oral Answers to Questions — SCOTLAND

Rabbit Traps

Sir William Darling: asked the Secretary of State for Scotland what progress he has made in finding a suitable rabbit trap to replace the gin trap; and how far experiments carried out with the Miller Killmore trap show that it may

be suitable for his approval under Section 50 (2) of the Agriculture (Scotland) Act, 1948.

The Secretary of State for Scotland (Mr. James Stuart): Since August, 1948, 15 new model rabbit traps have been submitted by eight inventors for consideration as alternatives to the gin trap but, unfortunately, none has proved suitable for statutory approval under the provisions of the 1948 Act. Field tests of the Miller Killmore trap have shown that it is a humane killer, although it lacks the degree of efficiency of the gin trap. The trap has real possibilities, however, and further tests will be carried out as soon as an improved model on which I understand the inventor is at present working becomes available.

Lieut.-Colonel Sir Thomas Moore: Does not the Sawyer trap fulfil all the requirements of efficiency and humanity?

Mr. Stuart: The Sawyer trap is the other trap which definitely has possibilities, and it is also being examined further.

Country Dancing Association

Major Lloyd: asked the Secretary of State for Scotland what grant was paid from the Public Education Accounts for the financial year 1950–51; and what allowance or grant is proposed, or has been paid, for 1951–52 to the funds of the Scottish Country Dancing Association, whose headquarters are at Edinburgh; and for what purpose.

Mr. J. Stuart: No grant has been made by my Department, nor has any education authority asked me to approve a proposal that they should make a grant.

Foreign Trawlers

Sir David Robertson: asked the Secretary of State for Scotland whether he will now close the Moray Firth, the Minch, the Firth of Clyde and other coastal waters against all foreign fishing craft.

Mr. J. Grimond: asked the Secretary of State for Scotland what action he intends to take for the exclusion of foreign trawlers from the Moray Firth or other areas.

Mr. J. Stuart: His Majesty's Government are at present considering what


effect the judgment of the International Court of Justice in the Anglo-Norwegian fisheries case may have upon British practice in relation to British exclusive fishery limits, and I regret that I am not at present able to make a statement.

Sir D. Robertson: Is my right hon. Friend aware that at this moment there is a very large foreign fleet fishing in the Moray Firth on grounds which are seriously depleted and which are barely yielding a livelihood to the British fishermen who use them in spite of the high prices that prevail, and will he please consider the heavy penalties which Scottish fishermen have borne for so long because of the inability of previous Governments to protect these grounds?

Mr. Grimond: Is this not an opportunity for the Government to press again for some general international agreement on fishing rights in the North Sea with a view to the preservation of stocks?

Mr. Stuart: I agree with the hon. Member. I would welcome that. With regard to the general question, it does affect international conventions such as the North Sea Fisheries Convention, 1882, and it affects Departments other than the Scottish Office alone. We shall do our best to get on with the matter.

Mr. Kenneth Younger: Will the right hon. Gentleman bear in mind that it is most important from the point of view of British fishing interests generally not to lend any colour to the suggestion that the Norwegian decision ought necessarily to be applicable to other fishing areas?

Mr. Stuart: No, Sir. I did not wish to give that impression. I am sorry if I did.

Bird Protection

Lieut.-Commander Clark Hutchison: asked the Secretary of State for Scotland whether he will introduce legislation for the protection of Scottish rare birds.

Mr. J. Stuart: Wild birds are at present protected during certain periods of the year by general legislation, and local authorities have power to apply for orders protecting birds in their area during periods of the year when no general protection is provided. My right hon. Friend the Secretary of State for the

Home Department and I are considering proposals submitted by the English and Scottish Wild Birds Advisory Committees to clarify and strengthen the law on this subject.

Town and Country Planning Act

Lieut.-Commander Hutchison: asked the Secretary of State for Scotland when he intends to introduce legislation to amend the Town and Country Planning (Scotland) Act, 1947.

Mr. J. Stuart: The Government are considering whether the Town and Country Planning Acts should be amended, but the subject is a complicated one which presents no quick solution. Legislation is unlikely this Session.

Fishing Industry (Losses)

Mr. Hector Hughes: asked the Secretary of State for Scotland if he is aware of the urgent need, caused by recent storms, of many Scottish fishermen for grants and loans to buy and repair their boats and fishing gear; and if he will take steps to make adequate provision for them.

Mr. J. Stuart: My inquiries show that fortunately the fishing fleet has suffered little damage. Special measures are not considered necessary.

Mr. Hughes: Does the Minister not consider that some measures are necessary to repair the damage, even though it may be small—I submit it is not small—which has occurred, and that if it is not repaired it will cause not only unemployment in the industry but loss of fish to the consumers who badly need it?

Mr. Stuart: Damage to boats is normally covered by insurance. It is not so in the case of nets unless there is total loss of a boat; but if there are special cases they can, of course, be considered for loan or grant, and I would be glad to look into the matter.

Educational Expenditure

Mr. Emrys Hughes: asked the Secretary of State for Scotland what proposals he has made for the reduction of expenditure on education in Scotland; and how this is likely to affect education in Ayrshire.

Mr. J. Stuart: No proposals have been made to education authorities or to the managers of other educational establishments for economies in education.

Mr. Hughes: Can the Minister assure us that in Scotland he is not going to pursue the reactionary policy that is being indicated for England, and will he give an assurance that there are to be no cuts in education in Scotland?

Mr. Stuart: I am afraid I cannot now add to what I have just said, but I suggest to the hon. Gentleman that he should await further proceedings.

Mr. William Hamilton: Would the right hon. Gentleman be more forthcoming about these prospective educational cuts than his counterpart in England?

Mr. Stuart: I am not in a position at present to add to the reply.

Highland Transport Costs

Mr. Grimond: asked the Secretary of State for Scotland whether he is now in a position to announce any reduction of freight charges in the Highlands and Islands.

Mr. J. Stuart: As I indicated in the reply to my hon. Friend the Member for Aberdeenshire, East (Mr. Boothby), on 20th November, I understand that the British Transport Commission are now preparing for submission to the Transport Tribunal a draft scheme of freight charges and have undertaken to keep in mind the recommendations of the Committee on Highland Transport Costs which was appointed by the Scottish Council, the Scottish Board for Industry and the Advisory Panel on the Highlands and Islands.

Mr. Grimond: Will the Secretary of State bear in mind that this problem becomes more and more urgent? The Highlands and Islands are capable of making a considerably greater contribution to our food supply, from land and sea, which is badly needed. They have considerable pockets of unemployment. It is quite impossible to make full use of their resources so long as freight rates remain so high.

Mr. Stuart: I do not think I can add usefully to my reply at present. All these points will be considered.

Mr. John MacLeod: Is the Minister aware that unless some consideration is given to these people living in remote areas, they will not be able to remain in these remote areas?

Mr. Stuart: I can assure my hon. Friend that I am interested in the subject for reasons of which he is aware.

Storm Damage, Northern Counties (Relief)

Sir D. Robertson: (by Private Notice) asked the Secretary of State for Scotland why he has decided that the costs of relief, rebuilding, repairs, cattle, sheep, pigs, poultry, fodder and other hurricane losses in Orkney, Caithness and Sutherland, are to depend on charity supported by a State contribution of £20,000, and if, having regard to the magnitude of the disaster, to the suffering of the people, and to the civil emergency which prevails, he will make a grant in cash and materials equal to £500,000 for distribution by the local authorities who will be responsible for its use.

Mr. J. Stuart: I welcome this opportunity of expressing the sympathy of His Majesty's Government, and, I am sure, of the whole House, with the people of Orkney and other northern areas who suffered in the recent storms.
Precise estimates of the damage are not yet available, but I have no reason at present to think that the proceeds of the appeals which have been made by the Lord Lieutenant of Orkney and by the Lords Provost of the five cities, to which His Majesty's Government have made a contribution of £20,000, will be insufficient to alleviate the hardship which has undoubtedly been caused. I was greatly impressed on my visit to Orkney by the spirit of independence and self-help which was everywhere evident, and all necessary steps have been taken to assist the work of restoration by making supplies available and by relaxing normal restrictions.

Mr. Woodburn: Has the right hon. Gentleman seen the reports in the Press that the damage from this hurricane has reached over £1 million, and, of course, if that is so, a gift of £20,000 does seem a little niggardly; and is he aware that this is not a charity to the Orkneys because it will be an actual investment? The Orkneys have been one of the best


food producing parts of this country and have developed their agriculture in a way quite unprecented, and this unforeseen act of God, as it may be described, has brought such distress that it would be an investment to restore these food producing qualities as soon as possible.

Mr. Stuart: I fully agree as to the importance of restoring the food producing abilities of the whole area, not only the Orkneys; but the right hon. Gentleman must bear in mind that insurance, of course, covers a certain amount of the damage which has been done, and I might add that it will be a little time yet before we can get a more or less accurate estimate of the full damage.

Mr. Thomas Williams: Since the late Government gave no less than £4,850,000 in respect of the disaster in Jamaica, this £20,000 looks almost derisory; and is the right hon. Gentleman satisfied—and this is the important point—that this very small amount is not likely to result in a much reduced output during this year?

Mr. Stuart: Undoubtedly there will be a reduced output of eggs and poultry—eggs in particular—but as regards livestock there was no loss to any appreciable extent. Feedingstuffs have been sent up, and I do not think that we need anticipate, apart from the poultry, any appreciable loss in output. As to the amount, there are precedents for such action on the part of His Majesty's Government and the position will, of course, be watched very carefully. I can assure the House that I have received letters from a number of persons in responsible positions in the North expressing their satisfaction at what has been done.

Mr. Grimond: Will the Secretary of State confirm that this grant was in the nature of immediate assistance, and that when the detailed estimates have been compiled of the actual damage done and of the relief that may be raised, he will look at this matter again? I think that the insurance will cover very little of it, and we do not know exactly what damage has been done.

Mr. Stuart: I agree that we do not yet know the exact amount of the damage. I am afraid that I cannot say more at the present moment because I do not

think that I have any authority from the Government to say more on that point, apart from the fact that we shall, of course, watch the position very carefully.

Mr. James H. Hoy: Does the right hon. Gentleman's last reply mean that the Government are still prepared to reconsider the size of the grant to this area? Is that what he meant by his answer?

Mr. Stuart: The reply meant what it said. I am afraid that I cannot say more at this stage.

Lieut.-Colonel Walter Elliot: May we take it that my right hon. Friend, in his further examination of this subject, will consider that Scotland as a whole—and I am sure the whole House—would wish the subject to be considered with sympathy, not merely from the point of view of production, but in regard to the disaster which has fallen on these people?

Oral Answers to Questions — HOUSING, SCOTLAND

Caithness

Sir D. Robertson: asked the Secretary of State for Scotland the average length of time taken to build a traditional type house in the Caithness County Council area since 1945; and how this time compares with the average time in other Scottish counties excluding burgh areas.

Mr. J. Stuart: I regret that the information cannot be provided in the form desired. Houses completed by Caithness County Council during December, 1951, took on average 91 weeks to build compared with 77 weeks for traditional houses completed by other county councils in the same month.

Sir D. Robertson: May I ask my right hon. Friend to make an inquiry into the housing situation in this county because they are going backwards and production is impaired? Will he also consider whether the insistence by his Department on the cheapest tender being accepted is not one of the causes for the hold-up, inasmuch as some contractors are getting far more than they can do?

Mr. Stuart: I am doing everything possible to speed up the completion, and if my hon. Friend has any particular points to put to me, I shall be very glad to hear them.

Water Pipes

Mr. Emrys Hughes: asked the Secretary of State for Scotland to what extent housing in Scotland is being delayed by the shortage of pipes needed for water supplies.

Mr. J. Stuart: I am not aware of any appreciable delay in housing on account of the shortage of water pipes. If the hon. Member will, however, let me have particulars of any such delays I shall be happy to look into them.

Mr. Hughes: Is the Minister not aware that the Minister of Works recently made a speech in which he said that water pipes were one of the greatest bottlenecks, and that this was giving him a considerable headache? Is the right hon. Gentleman aware that local authorities in Ayrshire are greatly disturbed when they are told that water pipes have been delayed because of the re-armament programme?

Mr. Stuart: I did not mean to say that there was an abundance, but I am not aware of delay in getting on with schemes. Where there have been definite shortages reported I am glad to say that the Departmet have been able to arrange for assistance from other authorities who happen to have supplies available.

Corporation Houses, Glasgow (Sale)

Mr. David Jones: asked the Secretary of State for Scotland what representations he has received from trade unions protesting against the decision of the Glasgow Town Council to sell 600 Corporation-owned houses; whether he is aware that many key-workers in the railway industry are applicants for the tenancy of Corporation houses; that if the decision to sell is authorised, railway applicants will be put far back in the list; and what action he proposes to take in this matter.

Mr. J. Stuart: I have seen representatives of the General Council of the Scottish Trade Union Congress on this matter.

I have told Glasgow Corporation that I am prepared to consent to the sale of the houses at Merrylee Road on the following conditions:

(1) There must be a safeguard to prevent the purchasers from re-selling the houses at a profit.

(2) Sales should be confined to:

(a) Tenants of existing houses belonging to the Corporation.
(b) Persons needing accommodation for reasons of ill health, e.g., tuberculosis patients.
(c) Persons on the Corporation's waiting lists who, in accordance with the customary procedure of the Corporation, would be offered Corporation houses within the next year.

Mr. Jones: Does the right hon. Gentleman realise that there are many hundreds of key railwaymen and transport workers in Glasgow living in deplorable housing conditions who will now be put well back in the list? Is he aware that this may well result in many of the key transport jobs in and around Glasgow not being filled, because men will not accept them because the prospects of their getting houses is very remote?

Mr. Stuart: I hope that when the hon. Gentleman studies the conditions which I have just announced he will realise that these points have been taken very carefully into consideration. I hope that the very dangers to which he refers will be avoided.

Mr. Woodburn: Will the Minister tell us what means he has of enforcing the decision which he has made and these conditions which he has imposed upon Glasgow?

Mr. Stuart: The right hon. Gentleman knows that the actual allocation is a matter for the local authorities, but it rests with me to state the conditions under which the sale of houses will be approved. I do not wish to interfere unduly with housing authorities. One naturally has some respect for their duties and responsibilities as properly elected bodies.

Mr. John Rankin: May I ask for a little further enlightenment on condition (c)? Could the right hon. Gentleman say whether, if a person who is qualified for a house this year cannot afford to buy that house, he will lose his right altogether to a rented house?

Mr. Stuart: No, Sir. This is a small percentage of the total number of houses built by Glasgow Corporation. The whole object of the conditions which I have outlined is to ensure that people who would normally be offered a house


will be offered a house. Those who wish to buy and are able to buy will have the opportunity of doing so.

Mr. James Carmichael: The right hon. Gentleman indicated that a certain number would be allocated to those people in the T.B. class. Has he any evidence from the records of the Glasgow Corporation of the incomes of people on the T.B. list? Can he give an indication of the number of persons in that category who will be permitted to purchase houses?

Mr. Stuart: No, Sir. I do not know the number, but if they are unable to purchase, then they will be offered houses to rent.

Mr. J. McGovern: Is the Secretary of State aware that with every house which now becomes vacant in Glasgow being offered for sale, and with these 622 houses being taken completely out of the pool, there will be comparatively few houses let to people with limited means? Is he also aware that a very small percentage indeed of the applicants for Corporation houses can afford to pay £3 or £4 a week for those houses? Will he not reconsider this scandalous decision about these houses?

Mr. Stuart: No, Sir. I cannot accept that this is a scandalous decision. I have taken great trouble to safeguard the position. It is not the case that every house which becomes vacant will be offered for sale. At the present time the Glasgow Corporation are dealing only with the Merrylee block. I hope that when hon. Members have considered this matter they will realise that the position will be safeguarded by the conditions I have announced.

Mr. Carmichael: rose—

Mr. McGovern: On a point of order. Owing to the unsatisfactory nature of this reply I shall take the earliest possible moment to raise this matter on the Adjournment.

Oral Answers to Questions — WAR PENSIONS (REVIEW)

Brigadier R. Medlicott: asked the Minister of Pensions if he has completed his review of war pension rates; and if he is now able to make a statement.

Sir Richard Acland: asked the Minister of Pensions whether he is now in a position to make a statement arising out of his review of the war pension rates.

Mr. Roland Robinson: asked the Minister of Pensions whether he has now completed his review of war pensions; and whether he will make a statement.

The Minister of Pensions (Mr. Heath-coat Amory): The position of war pensioners is being considered at the present time in the course of the Government's general review of pensions. I am not yet in position to make a statement.

Brigadier Medlicott: Can the Minister give some indication of how soon this statement will be made, in view of the difficulties which have been pointed out?

Mr. Amory: The difficulties are well understood, but the hon. and gallant Gentleman will realise that in addition to pensions administered by my Department, other pensions are being reviewed. In those circumstances I cannot either forecast the outcome or, at the moment, say when a statement will be made. I want to assure the hon. and gallant Gentleman that no avoidable delay is taking place.

Sir Ian Fraser: Will my hon. Friend and the Chancellor of the Exchequer receive a deputation from the British Legion in this matter before a final decision is made?

Mr. Amory: I cannot speak for my right hon. Friends, but I can assure my hon. Friend that I am always glad to receive a delegation from the British Legion.

Captain Robert Ryder: asked the Minister of Pensions if he will state the present purchasing value of the 60 per cent. rate of disability pension of 27s. a week payable to ex-privates for an amputated arm or leg, by comparison with the value of the 24s. a week paid in 1938.

Mr. Amory: Measured over the whole field of consumers' goods and services, the purchasing value today of 27s., the amount of the basic pension for disablement of 60 per cent. in relation to its purchasing value in 1938, is about 12s. 5d.

Captain Ryder: Does my hon. Friend not feel that this is a deplorable cut which has taken place in these pensions over


the years? Will he bear in mind the great urgency of the need to repair the damage which has been done?

Mr. Amory: I do not dissent from what my hon. and gallant Friend has said and that, of course, is among the reasons why this review is being held at present.

Brigadier Christopher Peto: In view of the fact that the Question refers to the fall in the purchasing value of the £ and the consequent rise in the cost of living during the last six years at any rate, has the Minister considered the advisability or otherwise of once again relating the payment of pensions to disability pensioners to the cost of living?

Mr. Amory: I do not think I can add to what I have already said. All aspects of this matter are being reviewed in the course of the present review.

Dr. Horace King: asked the Minister of Pensions whether he has considered the claims of the British Limbless Ex-Service Men's Association on behalf of limbless ex-Service men, with a view to raising the basic pension for these men.

Mr. Amory: Full consideration is being given to the claims made by ex-Service organisations, including the British Limbless Ex-Service Men's Association in the course of the review to which I have just referred.

Mr. I. Mikardo: Apart from the question of the rates of pensions, will the hon. Gentleman take into account the views of the British Limbless Ex-Service Men's Association on the subject of the equalisation of pensions for the same disability between different ranks?

Mr. Amory: I can assure the hon. Gentleman that all the views expressed by the British Limbless Ex-Service Men's Association will be taken carefully into consideration. Were there any chance of my failing to do so, the kindly and indefatigable jogs to my memory given by hon. Members would remove that risk.

Dr. King: Will the hon. Gentleman bear in mind, in considering the claims of these men, that the basic pension paid in respect of loss of limb is probably the only aspect of our second war pensions scheme which compares unfavourably

with the scheme after the first war? The view of hon. Members on both sides of the House is that these men have a really strong claim.

Mr. Amory: I will certainly bear in mind what the hon. Gentleman has said.

Oral Answers to Questions — BRITISH ARMY

Catterick Camp

Mr. Henry Channon: asked the Secretary of State for War if he will now make a further statement about the ill-treatment of Signalman Walter Jones at Catterick Camp last November.

Mr. Ede: asked the Secretary of State for War if the inquiry into the allegations of brutal conduct against Signalman Walter Jones at Catterick Camp has been finished; what conclusions he has reached; and what disciplinary action has been taken against any individuals, whose action has been shown to be blameworthy.

The Secretary of State for War (Mr. Antony Head): I have not been fully satisfied with the conditions at Catterick Camp and I therefore called for a special report. I hope and believe that the steps which have recently been taken will prevent a recurrence of incidents of this kind. I will, however, undertake to keep this particular problem under close attention.
As regards the ill-treatment of this man, following an inquiry one non-commissioned officer and six signalmen were convicted by district court-martial on 11th January. The non-commissioned officer was found guilty on two charges of assault occasioning bodily harm and of ill-treating a soldier, and is now serving a sentence of six months' detention. The six signalmen were found guilty of assault occasioning bodily harm and are each serving sentences of 42 days' detention.

Z Reserve

Dr. King: asked the Secretary of State for War if he will exempt men who have done active service in Korea from Z Reserve call-up.

Mr. Head: No Reservist who was called up from civilian life for service in Korea will be recalled for training this year. It may be necessary, however, to


recall a few Regular Reservists with Korean service who have recently completed their Colour service.

Dr. King: May I thank the Secretary of State for his answer?

Colonel Ralph Clarke: asked the Secretary of State for War if he will, in future, ensure that Z Reservists serve their training with the nearest possible Territorial unit to their homes, which should encourage them to undertake Territorial service afterwards.

Mr. Ian Harvey: asked the Secretary of State for War what steps he has taken to ensure that men are not called up under the Z Reserve scheme with Territorial Army units from an unreasonable distance of the headquarters of those un its.

Mr. Head: I have arranged for a resort, with the object of selecting men for units near their homes, to be made of all reservists who are to be called up for training with Territorial Army units this year. This has been done. I would, however, remind my hon. Friends that, owing to the increasing specialisation of the Army, the need to get the right man in the right job often conflicts with the attempt to post men to units near their homes. As a result, the extent to which geographical posting is possible inevitably varies in different arms and units.

Colonel Clarke: Does my right hon. Friend appreciate that, even with the qualifications he has given, this news will be a source of satisfaction to Territorial officers who are keen on recruiting, and who regret that something of the same sort has not been done before?

Army Council (T.A. Representation)

Mr. Ian Harvey: asked the Secretary of State for War whether he will revise the composition of the Army Council in order to include the Director of the Territorial Army.

Mr. Head: No, Sir. Since the war the status of the Territorial Army has been changed. It is no longer a self-contained voluntary reserve army, but forms part of the integrated national army. Each Army Councillor deals with Territorial Army affairs in the same way as he deals with Regular Army matters of his responsibility.

Mr. Harvey: Does the Secretary of State not feel that, in view of the fact that the Director of the Territorial Army is now also responsible for the Home Guard, the civil problems that arise are of great importance, and that, therefore, they should be dealt with at that level?

Mr. Head: No, Sir, I think that the implications of National Service have been more and more to fuse the Regular Army with the Territorial Army, which is, in effect, the reserve army; and I am sure that, with the present Army organisation that would be an unwise step.

Oral Answers to Questions — KOREA

British Personnel (U.S. Units)

Mr. Ian Harvey: asked the Secretary of State for War what financial arrangements are made for British troops attached to American units in the Korean theatre of war.

Mr. Head: British troops attached to United States' units in Korea may obtain advances of pay in dollar scrip converted at the official rate of exchange. In view of the imperative need to limit dollar expenditure to essentials, the amounts that may be drawn are restricted. The limits for an officer vary between the dollar equivalents of £27 and £15 a month; for other ranks between some £16 and £8. I have made special inquiries and find that there have been locally no complaints of the inadequacy of these amounts.

Sir W. Smithers: What is the present rate of exchange?

Mr. Head: I should not like to answer that question, which is outside the scope of my responsibility, without notice.

Lieut.-Colonel Marcus Lipton: Is the right hon. Gentleman aware that there is a system of barter whereby British manufactured spirits are exchanged for American heating stoves, and things of that kind?

Mr. Head: No arrangement made by this House or anywhere else will, I think, prevent the British soldier from engaging in barter when he feels like it.

Winter Equipment

Major H. Legge-Bourke: asked the Secretary of State for War whether he


will make a statement on the equipment of the British troops in Korea; and the conditions under which they are serving.

Mr. Robson Brown: asked the Secretary of State for War if he will make a statement on the latest position with regard to supplies of winter clothing and equipment for our troops in Korea

Mr. Frederick Peart: asked the Secretary of State for War if all British troops in Korea have now been issued with adequate protective clothing for winter conditions.

Mr. Baker White: asked the Secretary of State for War if he is aware that although winter started in Korea on 1st November members of British units in the Commonwealth Brigade were still without proper winter kit on 14th January; and if he will explain the reason for this delay in leaving men of our Forces without adequate protection against the winter.

Mr. George Chetwynd: asked the Secretary of State for War whether all British troops serving in Korea are adequately equipped with winter clothing.

Mr. D. Jones: asked the Secretary of State for War whether he is aware that the British troops on the Korean war front are short of warm winter clothing and that very cold weather is being experienced there at this time; and whether he will make a statement as to the responsibility for this state of affairs; and what steps are being taken to remedy the position.

Mr. Derek Walker-Smith: asked the Secretary of State for War why proper and timely arrangements were not made for the provision for winter clothing for troops in Korea.

Brigadier O. L. Prior-Palmer: asked the Secretary of State for War if he will make a statement on the equipment of the British troops in Korea with special reference to winter clothing.

Mr. Head: I apologise to the House for the length of this answer, but I think it would wish me to give a full reply.
Shortly after taking office I inquired into the position about winter clothing; and on 13th November, in reply to a Question by my hon. Friend the Member for Huntingdon (Mr. Renton), I stated

that there was, at that time, sufficient winter clothing in Korea of the type provided in the winter 1950–51 for the equipment of the whole Force in 1951–52. This clothing was, by all reports, found to be generally satisfactory and, as stated, sufficient was available for every man.
I also said:
A new range of winter clothing has been produced in the light of last winter's experience. Of this, sufficient quantities are now in Korea to clothe all fighting troops, and it is hoped that by January there will be enough for every man."—[OFFICIAL REPORT, 13th November, 1951; Vol. 493, c. 793.]
This new type winter clothing has been under development since 1946. After trials and various improvements the War Office decided in March, 1951, to issue it for large scale user trials in Korea. It was known that sufficient new type clothing could only be made available in the early part of this winter in Korea for fighting troops, and I understand that the decision to issue only part of the force with the new type, instead of waiting till the whole force could be equipped simultaneously, was only taken after careful consideration of the implications.
It was hoped to complete the whole force by January. In fact, the quantities then forecast have been exceeded, and the Ministry of Supply, the manufacturers, and those responsible for despatch, deserve much credit for the speed with which deliveries were made.
At the beginning of this winter (November, 1951), every man was completely equipped with the old type clothing. Subsequently, as they began to issue the new type clothing, part of the Commonwealth Division were clothed in old type, part in new type. The latter proved itself much superior, and I have no doubt that complaints and dissatisfaction arose among those men who were not issued with the new type. As a result, every available new type suit in the theatre was issued, a course which was bound to produce difficulties over sizes because, as I have already said, the necessary reserves, which confer some latitude in sizing, could not be in the theatre before January. It may be that this difficulty was aggravated because, although this kit was originally designed to be worn complete and alone, additional garments, such as battledress, were worn underneath the parka, the outer coat lined with fleece.
The position at the present moment is as follows:
In all items of boots and clothing there is now a considerable surplus to the numbers of men in Korea. The number of parkas exceeds our original forecast, and there are sufficient in the theatre for issue to all men. My latest information is that there are more than sufficient boots for the whole force excepting an outstanding requirement for some 13 pairs of boots of the very largest size.
I would remind the House that this new type winter clothing is still experimental and under user trials. First reports indicate an unexpected rate of wear in trousers. The normal wastage rate may, therefore, be considerably exceeded, and urgent steps are being taken to ensure that additional replacements can be made available.
I expect and desire criticism in this most important matter, and the Press have quite properly taken a most active interest. At the same time I hope that the report which I have given to the House will be made known. I express this hope, not to vindicate myself or my Department, but because, after careful inquiry in the War Office, the receipt of a direct report from the Division Commander, and after seeing several individuals recently returned from Korea, I am of the opinion that some Press reports may have caused undue anxiety among relatives of men now fighting in Korea. That is something which I am sure neither this House, the Press nor the men in Korea would wish.

Major Legge-Bourke: While thanking my right hon. Friend for the fullness of his reply, which I am sure will have done much to allay anxiety in the country, might I ask him whether in the future he will do all he can to ensure that, when some new piece of equipment or clothing is discovered, issues are made on as broad a basis as possible, in co-ordination with the other troops with whom our own men will be fighting?

Mr. Head: I will certainly bear in mind what my hon. and gallant Friend says.

Conditions of Service

Captain Richard Pilkington: asked the Secretary of State for War what further steps his Department are taking to

improve conditions of service for British soldiers in Korea.

Mr. Head: I am not quite certain to what my hon. and gallant Friend is referring. In general, policy regarding conditions and terms of service is framed for the Army as a whole. I am not, therefore, carrying out any special examination in relation to British troops in Korea. The general terms of service are, however, now being reviewed and I intend to announce certain changes when I introduce the Army Estimates.

Captain Pilkington: While thanking my right hon. Friend for that answer and for his previous reply, which covered a good many of the points I had in mind, might I ask whether he has been able to do anything to improve postal facilities and facilities for men who wish to send presents home from Korea?

Mr. Head: The latter of those matters is being considered at the present moment. On the former matter, there is a Question on the Order Paper, which I shall be answering later.

Oral Answers to Questions — ARMED FORCES (WAR-TIME OFFENCES)

Mr. W. T. Proctor: asked the Prime Minister if he will recommend the granting of a general amnesty in connection with offences committed by members of His Majesty's Forces during the Second World War.

The Prime Minister (Mr. Winston Churchill): No, Sir. In agreement with the late Government I do not think that a general amnesty is an appropriate method of dealing with the small number of persons undergoing imprisonment for offences of the kind described. All sentences awarded by courts-martial are reviewed automatically at short intervals by the competent authority and the fullest weight is given to any compassionate considerations which may arise.

Lient.-Colonel Lipton: Does that answer mean that no consideration has been given to the question of deserters who are still liable to penalty? Could not a conditional amnesty be given in cases of that kind?

The Prime Minister: That is not a new issue at all. It has been frequently considered.

Mr. E. Fernyhough: Does not the right hon. Gentleman think that charity begins at home; and, inasmuch as we have freed Nazi war criminals, might we not give the same consideration to our own people?

Oral Answers to Questions — EDUCATIONAL EXPENDITURE (CIRCULAR)

Mr. Peart: asked the Prime Minister if he will issue instructions to all Ministers that, when cuts have been decided on in regard to the expenditure of their Departments, these cuts are to be announced at a time when this House is sitting and the economies can be discussed.

The Prime Minister: The House should always be given an opportunity of discussing important changes of policy. But administrative measures may be necessary when the House is not in Session.
The circular issued by the Ministry of Education—if I might plumb the thought behind this Question—on 7th December last year was to ask local authorities to review their figures of expenditure for 1952–53 and to attempt to reduce them by about 5 per cent. They were then already engaged in the preparation of their estimates and it was necessary to give them guidance at the earliest possible moment. The fact that the issue of this circular took place on the same day that the House adjourned was due to coincidence and not design.
Let me assure the House that every effort will be made by His Majesty's Government to bring necessary and controversial measures before the House so that they can be effectively debated.

Mr. Peart: Is the Prime Minister aware that he has today revealed a very guilty conscience; and does he realise that to issue this circular, which envisages very severe cuts in educational expenditure, on the very day Parliament adjourned was a shocking contempt of the House of Commons?

The Prime Minister: I am quite sure that this Government will not be guilty of a contempt of the House of Commons; but I also feel that, among any defects which may be attributed to us, fear of a furious row in the House of Commons must not be included.

Mr. George Chetwynd: Can the Prime Minister say why both he and the Minister of Education evaded making any reference to this circular when they were being heavily questioned about educational cuts on the same day? Was it because, as has been reported, the Minister of Education had no knowledge of the circular?

The Prime Minister: As I am informed, my right hon. Friend had approved the circular but at the time she had no precise information of when it was actually to be issued by the Department.

Oral Answers to Questions — WORLD PEACE

Mr. Dodds: asked the Prime Minister if he is aware of the public desire for personal talks between Marshal Stalin, President Truman and himself in order to lessen the international tension; and if he is now in a position to make a statement regarding a meeting between himself and Marshal Stalin.

The Prime Minister: I have nothing to add to the reply which I gave to the hon. Member on 12th November last year. It might shorten time if I read it:
There are at present no plans for negotiations on general problems with the Soviet Union, but the possibility of a high-level meeting should not be excluded if circumstances are favourable."—[OFFICIAL REPORT, 12th November, 1951; Vol. 493, c. 644.]

Mr. McGovern: Will the Prime Minister take care not to rule out the possibility of meeting Marshal Stalin, bearing in mind that Stalin has already met Ribbentrop, Chiang Kai-Shek and the Japanese Ambassador, whom he kissed on both cheeks; and will he see that that is not repeated if he should meet him?

The Prime Minister: The hon. Gentleman is as good a judge of such delights as I am.

Oral Answers to Questions — UNITED STATES AND CANADA (PRIME MINISTER'S VISIT)

Sir I. Fraser: asked the Prime Minister if he will make a statement on his recent visit to Washington.

Mr. Donnelly: asked the Prime Minister if he will make a statement to the House on his recent talks with President Truman.

Mr. Fenner Brockway: asked the Prime Minister what commitments have been made on behalf of the Government for action against China should the ceasefire negotiations in Korea fail, or if an agreement is not kept by the North Korean forces.

Mr. M. Philips Price: asked the Prime Minister whether the Government's proposal that a United States of America force should assist in the defence of the Canal Zone refers to the immediate situation or to the time after the proposed Four-Power Agreement with Egypt has been concluded.

The Prime Minister: I had thought that it would be more convenient for the House if I dealt with all these matters and others in opening the Debate on Foreign Affairs which is to begin on Tuesday next. All points could then be thrashed out in immediate discussion and there would be no need to interrupt the most important debate now impending on the proposals to be put forward by my right hon. Friend the Chancellor of the Exchequer.
As, however, I learn it is the wish of the Opposition that some statement should be made dealing with the particular issues mentioned in the Questions to which I have referred, I should be prepared to make a preliminary statement to the House tomorrow before the debate on the financial and economic situation is resumed.

Sir I. Fraser: Would that be following Questions?

The Prime Minister: Yes, Sir. It would follow Questions and would, of course, to that extent postpone the discussion to take place on what we are to hear about today.

Mr. C. R. Attlee: Will it include a statement with regard to the present position in Persia?

The Prime Minister: I had not contemplated that I should include that in the brief Parliamentary statement which I will make tomorrow. The whole debate on foreign affairs will take place next week. No doubt these matters must be considered, but I had no special announcement to make in relation to Persia in my statement on the American visit.

Mr. Attlee: I was understanding that the right hon. Gentleman would deal broadly with the matters discussed with the American Government, and I take it that Persia was one of the matters which was discussed.

The Prime Minister: If I am to deal fully with all these matters I shall certainly require to trench quite lengthily upon the time of the House tomorrow. I thought it would be more convenient to deal with these matters in a debate, when I should open and when any criticism could immediately be made or further questions asked.
It is entirely a matter of the convenience of the House, but it seemed to me not entirely in accord with that convenience that the important financial and economic issues which now have to be discussed should be completely interrupted by another topic equally, and perhaps more important, but not, as I conceive it, to be affected in urgency by the difference between this Tuesday and the next Tuesday.

Mr. Attlee: Does the right hon. Gentleman realise that on some matters there is considerable anxiety about what took place on the other side of the Atlantic?

The Prime Minister: Yes, and it is on those points about which there is considerable anxiety that I propose, in a comparatively few sentences, to endeavour to enlighten the House, and, I trust, relieve the anxieties which prevail.

Oral Answers to Questions — QUESTIONS TO MINISTERS

Mr. Hale: May I, Mr. Speaker, ask a question with regard to the rights of Private Members at Question time? In previous Parliaments the practice always has been that when a Minister has a long and important statement to make he ventures to seek the help of the Chair, which has always been readily given, to ask permission for that statement to be made at the end of Questions, so that other questions will not be held up. Today we had a most helpful statement from the Secretary of State for War, which took many minutes to read, and that had the unfortunate effect of preventing the Prime Minister and the Chancellor of the Exchequer from replying to a number of questions which, I am sure,


they were passionately anxious to answer. I do not suggest for a moment that that was a smoke-screen to prevent those questions from being reached, but I think that you will agree that such a procedure could be an abuse of the rights of Members, and it might be as well if Ministers were aware of the procedure which has been going on for many years until this Parliament was elected.

Mr. Speaker: I agree that the interpolation of a long answer to a particular question in the middle of Questions does entrench on the limited time which I have to do my best to parcel out. There were exceptional circumstances in this case—the deep interest displayed in the question and so on—but I agree with the hon. Member that it would be as well in future if long statements could be deferred to the end of Questions.

BUSINESS OF THE HOUSE

Mr. Attlee: Could the Leader of the House tell us whether there has been any alteration in Business?

The Minister of Health (Mr. Harry Crookshank): Yes, Sir.
My right hon. Friend the Chancellor of the Exchequer proposes today, with your permission, Mr. Speaker, to make a statement on the financial and economic situation, and afterwards we shall proceed with the Second Readings of the Bills already announced.
The Business for tomorrow and Thursday will be changed and a debate will take place on the financial and economic situation on a motion to be tabled by the Government.
Friday's Business is unchanged and Private Members' Bills will be considered.
Arrangements will be made next week for a debate on Foreign Affairs and on my right hon. Friend the Prime Minister's visit to Washington and Ottawa.
We hope also that it will be possible to arrange for a debate on Welsh Affairs next week.
My right hon. Friend the Chancellor of the Exchequer is making his statement today in response to the request of the Leader of the Opposition. It will be somewhat lengthy, but the Government

believe that it will meet the general convenience of the House to hear the Chancellor's proposals in full before entering upon the debate tomorrow.

Mr. Attlee: Is the Foreign Secretary going to make any statement today on Egypt?

Mr. Crookshank: He is just about to rise.

EGYPT (TERRORIST ACTIVITIES)

The Secretary of State for Foreign Affairs (Mr. Anthony Eden): With your permission, Mr. Speaker, and that of the House, I should like to give some account of recent events in Egypt.
From the earliest days of the tension in the Canal Zone His Majesty's Forces in that area have at all times done their utmost to avoid conflict with the Egyptian authorities. The increase of terrorist activities, however, supported in many cases by detachments of the auxiliary Egyptian police, compelled His Majesty's Government to act if the security of the Canal Zone of the British base and of our forces themselves was to be preserved.
I wish to give the House some account of the nature and activities of these auxiliary police. This force was not introduced into the Canal Zone until after the late Egyptian Government had denounced the Anglo-Egyptian Treaty of 1936 in October last. It was supposed to be charged with the task of assisting the regular police to preserve law and order. In fact, its energies were mainly directed to intimidating Egyptian labour employed by His Majesty's Forces, and later to conniving at and taking part in terrorist activities against our forces, many of which resulted in the deaths of British soldiers.
Urgent representations were made to the Egyptian authorities on several occasions both by His Majesty's Ambassador in Cairo and by the British military authorities in the Canal Zone about the activities of these auxiliary police. His Majesty's Embassy addressed four written notes about this to the Egyptian Government; on 24th November, on 5th December, on 15th December and on 19th January. On at least four occasions also His Majesty's Ambassador made oral


representations to Egyptian Ministers, and General Erskine several times brought these activities to the attention of the local Egyptian authorities. We urged that these companies, which had never previously been armed with rifles but only with staves, should be disarmed or withdrawn.
The late Egyptian Government paid no heed to these representations. It is on the contrary only too clear that so far from wishing to prevent armed clashes with the British Forces, they were actively concerned to provoke them. This produced a critical situation at Ismailia in view of the military measures which had to be taken there to round up the terrorists. The British Commander, therefore, had no alternative but to disarm the auxiliary police. The latter had explicit instructions from the then Egyptian Government to resist, and consequently General Erskine had no option but to use force. In this, and indeed throughout, he had full authority and support from His Majesty's Government.
In the course of the action which followed one officer and three other ranks of His Majesty's Forces lost their lives and 13 others were wounded. Unconfirmed figures of Egyptian casualties are 42 killed and 58 wounded. This tragic event, which we all deplore, has brought sorrow to many homes, both in Britain and Egypt. It has, however, done nothing to diminish the ability and determination of His Majesty's Government to maintain their rights under the Treaty of 1936 until such time as a new agreement to replace that Treaty can be reached.
On Saturday last a serious outbreak of rioting took place in Cairo. I deeply regret to have to inform the House that in the course of these riots at least eight British lives were lost, including that of the Canadian Trade Commissioner in Cairo. I am sure the House will wish me to express its profound sympathy with their relatives no less than with those of the British soldiers who lost their lives. At the same time, the House will wish me to express a sense of horror at the atrocities which the former Egyptian Government was unable to prevent and which were the direct consequence of their policy of inciting the population to acts of violence.
I regret also to have to report that very considerable damage was done during these riots to British and other foreign property in Cairo. Order was restored only after the Egyptian Army had been called upon to intervene. His Majesty's Ambassador addressed a Note to the Egyptian Government on the 27th January, informing them on behalf of His Majesty's Government in Canada and in the United Kingdom that the Egyptian Government will be held fully responsible for all loss of life and property, and that the rights of His Majesty's Governments in that connection are fully reserved.
Meanwhile I take note that the new Egyptian Prime Minister has declared that his Government's first task will be the restoration of law and order and the protection of life and property, foreign as well as Egyptian.
I wish now to make a few observations of a more general character about the present state of Anglo-Egyptian relations.
One of the worst features of recent events in the Canal Zone is that unscrupulous men have sought to turn what is in some cases no doubt genuine national sentiment into terrorist activities. I have always believed that it should be possible to find a solution of the differences between this country and Egypt which satisfies the legitimate national aspirations of the Egyptian people, and at the same time does not jeopardise the security of the free world. In a Note to the Egyptian Government on 6th November, 1951, we stated that His Majesty's Government were willing, as their predecessors had been, to enter into negotiations at any time for a revision of the Treaty of 1936, under the procedure set forth in Articles 8 and 16 of that Treaty. In my speech to the House on the 19th November I repeated that offer. It still stands.
It is the aim of His Majesty's Government to reach agreement on arrangements for the adequate defence of the Canal Zone which would meet legitimate Egyptian aspirations. We fully accept that this is by no means exclusively an Anglo-Egyptian interest, but one in which we have an international responsibility.
In these last weeks there have been many violent episodes with their accompanying loss of human life. The memory of them, bitter though it must be in both


countries, should not prevent us from looking and working towards a better future. It remains our hope that passions will cool and that it will then be possible to reach a settlement in which each side will respect the sincerity of the other's point of view.

Mr. Herbert Morrison: I am obliged to the right hon. Gentleman for his statement. I know that it would be the wish of all my hon. Friends on the Opposition benches that we should associate ourselves with the expression of sympathy with the relatives of those who have been killed or injured in these incidents. I have only one question—or at the most two—to put to the right hon. Gentleman.
We can take it, I presume, that the action at Ismailia with regard to the police was specifically authorised by His Majesty's Government. I would ask the right hon. Gentleman also whether the police concerned had warning from the British authorities, so that they had an opportunity voluntarily to take the action that was desired before active hostilities began.

Mr. Eden: Yes, Sir, that action was definitely authorised by His Majesty's Government, and not only one warning but repeated warnings were given to the Egyptian authorities, and on the spot. I should be quite willing, if the House desired—or more properly perhaps through the Secretary of State for War—to give a detailed account of what happened and how it was handled. I have been into the full account myself very carefully, and I am satisfied that everything that could humanly have been done was done to try to avoid the clash that eventually occurred.

Mr. Harold Davies: Are His Majesty's Government making every effort to reopen discussions on the 1936 Treaty under Articles 8 and 16? Secondly, are His Majesty's Government aware that the diplomacy of the Prime Minister in the United States, by inviting Americans into the Canal Zone, was the diplomacy of a cave man? [HON. MEMBERS: "Oh."] Is the right hon. Gentleman aware that his policy exacerbated the Moslem world? Lastly, may I ask the Foreign Secretary if he has reviewed the possibilities of moving the base from there to the Israeli State and of getting discussions with the Israeli State on that point?

Mr. Eden: In reply to the first part of the hon. Gentleman's question, I have very carefully chosen the words of my statement, after giving a good deal of thought about how to present it at this time, and I think I would rather stand on those words, so far as the position of His Majesty Government is concerned. As regards the second part of the question, I have yet to learn that sharing a burden is other than a Christian virtue.

Mr. John Hynd: I am sure that most hon. Members will sympathise with the position in which General Erskine finds himself, and will agree to a great extent with what has been said by the Foreign Secretary. I am not so satisfied that all hon. Members and people outside will be completely reconciled about the action that was taken against police headquarters on the statement that has been made.
Is it not the case that we are, I believe rightly, holding our position in the Canal Zone in accordance with our rights under the Treaty until those rights have been altered by agreement? If that is so, are we authorised under any right that we may hold in the Suez area to initiate action against any official body, even though some members of that body may have been suspected, or proved, to have taken part in acts of terrorism against British troops? I am sure that no one could object to any action that may have been taken by our forces against anyone proven to have been taking action against them, but can the right hon. Gentleman give us any information as to the basis upon which we claim the right to initiate an action of this kind?

Mr. Eden: I think that there is no dispute in any part of the House that we base ourselves on the Treaty of 1936, nor any dispute as to the obligation which that Treaty lays upon us. It has been clear for some time that these auxiliary police were, instead of being police, deliberately inciting and encouraging, and taking part in, terrorism against our forces which are carrying out their legitimate duties. I am willing to answer any Question on the paper about this, but I can assure the hon. Gentleman that a great deal of trouble was taken to try to avoid this kind of situation. If our troops are to have the protection which is their right under the Treaty we cannot limit commanders to taking action against terrorist


organisations which are not carrying on a proper war but perhaps something rather worse, which is this type of war.

Sir Herbert Williams: Is this a debate or a Question?

Mr. Speaker: I can allow only one more supplementary question on this matter. I must point out that we are to have a foreign affairs debate next week. Some of the sentiments that have been expressed have been more suitable for debate than for Question time.

Mr. Aneurin Bevan: Is the Foreign Secretary aware that these collisions between British forces and the civilian population of Egypt jeopardise the value of the base as a military base for us in any event? Were the Government aware of, and did they authorise, the character of the weapons used in the attack on the police headquarters? In view of the fact that we are to have a foreign affairs debate, will there be a White Paper giving details of the incident so that we can discuss it more intelligently?

Mr. Eden: As regards individual action, naturally the Government take full responsibility for any action taken at that time. As regards weapons used, I should be willing to deal with that point. I would only say this now: that also, I know, was carefully considered from every point of view, including, in particular, that of loss of life. I would only ask any hon. Member to consider whether, if the operations had been dragged out longer or if smaller weapons had throughout been used, the loss of life would not have been very much heavier? Personally, I have not the slightest doubt that it would have been.

Several Hon. Members: rose—

Mr. Speaker: Order. We cannot continue this discussion any further.

Mr. Bevan: What about the White Paper?

Mr. Eden: I will see whether I can furnish more information to the House this week.

Mr. Speaker: We are to have a foreign affairs debate next week

FINANCIAL AND ECONOMIC SITUATION

The Chancellor of the Exchequer (Mr. R. A. Butler): With your indulgence, Mr. Speaker, and that of the House, I desire to make a statement on the financial and economic position. I am sorry that the words of the Leader of the House may prove to be true, namely that the statement will be fairly lengthy, but in the circumstances that cannot be helped. I should only like to say here, quite humanly, that I am very glad that we are all back at school together and that we can discuss these matters again.
I first spoke to the House as Chancellor of the Exchequer on 7th November, when I described the economic situation of the country and put forward certain remedies, only 11 days after the Government had come into office. Everything that has happened since has confirmed the impression which I sought then to give to the House, namely, that we were then, and are now, confronted with a grave situation. The Government then brought forward certain stop-gap and immediate measures.
Since then we have had the opportunity of considering the position more fully, and I have further decisions to announce today. Before I do so, I think it proper to set forth quite shortly some of the fundamental truths about our economy and about the impact which success or failure in our handling of our own affairs can have on the position of our own country and on the future of the Commonwealth and the free world as a whole.
As a people of 50 millions living on a small island, and dependent entirely, or largely, for our daily life upon supplies from abroad of half our food, nearly all the raw materials for our factories, and nearly all our petroleum, we are in a difficult position. We have, however, by our accomplishments over the centuries become a great power in the world, both in our own right and as the centre of a mighty Commonwealth, and we intend to maintain this heritage. Our currency is the currency in which half the world's trade is conducted. The territories for which we are responsible in these matters spread around the whole world. The Commonwealth, with whom I have been recently conferring, is an essential link between the United States, on the one


hand, and Western Europe, on the other. If we allowed our economic strength to deteriorate and decay, not only would our lives be impoverished, but the whole aspect of the problems confronting the free world as a whole would be irremediably worsened.
We as an island cannot carry these great responsibilities without earning the means to pay for them, and it is the harsh truth that our economic position in the world has been deteriorating for about half a century. [Interruption.] Well, I want to give the background against which we can work, and the more accurate that background is, the more sure we shall be of the remedies.

Mr. I. Mikardo: Why was that not said last October?

Mr. Butler: Our resources have been depleted by two world wars into which we unhesitatingly threw all our resources. The result of this is that, in addition to the other burdens which are upon us, we have become the largest debtor country in the world, whereas for generations we had been the largest creditor.
In these circumstances, every good citizen is bound to ask himself this question: Is he, or she, prepared to make the effort which will enable this country to play its part in the Commonwealth and in the free world, and to maintain and, as time goes on, to increase those standards of social progress to which we on all sides of this House are committed? This is the vital question, and there can be only one answer to it. We must succeed. We are entitled, if others think it worth while, to receive help in our defence programme for a common cause, but, for the rest, if we are to maintain our position and our independence and stand on our own legs, we must pay our own way.
I must talk today a great deal in terms of what are called economics and statistics, but this problem is not one just of facts and figures. It is a great moral issue, and if we fail to answer the moral challenge, then all else will crumble. The purpose of everything that I now have to propose, therefore, is to enable this country to pay its way.
I must first say how the broad strategy, which we must follow resolutely if we are to succeed, fits into the discussions which I have been having recently with

my fellow Finance Ministers in the Commonwealth. I should like to say—this is a very important aspect of the conference—that at this conference the Colonies, whose Governments and people have made such noble and useful efforts on our behalf as well as their own, were represented by my right hon. Friend the Colonial Secretary and by representatives of the Colonial Governments, who, I am glad to say, took part in our debates. There was no doubt at all about one matter—we were all confident of the future. Whatever our present difficulties are, we were determined not only to overcome them but also, above that, to go on from them to better things by increasing our earning power.
Restrictions and cuts are only palliatives. Expansion and development of the great resources which each of us commands are the only real and lasting remedies, and I must say that our imaginations were fired by the extent of these resources in the overseas dependencies and in the Commonwealth as a whole. I am also glad to say—this is our great hope for the future—that we have also formed groups to put into practice some of the ideas which we discussed and to study their implications. There is one on development under my hon. Friend the Under-Secretary of State for Commonwealth Relations and another, under the Minister of State for Economic Affairs, is on the steps to be taken towards the convertibility of sterling. These Ministers are presiding over meetings of representatives of the Commonwealth as a whole, and we are, therefore, carrying forward the work of our conference.
Our aims at the conference were to preserve the strength of sterling and, above all, to establish each country's economy on a sound and stable basis. The only thing I want to read to the House is a short extract from our statement saying that these aims:
… can best be achieved when the worldwide trade of the sterling area is on a substantially higher level than at present, when sterling is freely convertible into all the main currencies of the world, and its position need no longer be supported by restriction on imports.
Thus we proclaimed our faith in the future.
But there will be no future unless the sterling area can overcome the immediate and pressing difficulties which face it. The whole foundations of our trade, and, therefore, our existence—the central reserves—must be preserved and must be built up again. In other words, the sterling area as a whole, and not only this country, must face up to the basic need of paying its own way. To all of us in the conference it was clear that, unless the sterling area paid its way, the stability of our currency would be undermined, with great loss to ourselves and to our friends outside, and, therefore, we were all agreed that we should not spare ourselves at all in taking whatever action was necessary to put the whole area firmly back on the road to complete recovery.
Now I should like to state, for the benefit of the House, the facts which were before the meeting of the Commonwealth Finance Ministers. In the year 1950 the sterling area as a whole had been in surplus with the rest of the world to a total of about £427 million—I repeat, in surplus. In the first half of 1951, although the position of the United Kingdom was worse, the surplus was rather bigger, at the annual rate of £550 million. Then in the second half of the year had come the dramatic change, a deficit with the rest of the world at an annual rate of no less than £1,450 million. The gold reserves had fallen between June and December, 1951, by two-fifths, or £550 million, until no more than £835 million were left. That is the fact that we had to face, and manifestly to anyone concerned a drain on our resources at this rate could not be allowed to continue. If it did continue, it would mean starvation and unemployment for the people of this island and economic disaster for other members of the Commonwealth.
That was the picture before us and the problem as we saw it together, not just a partisan or a single-country or a single-party view, but the view of all of us. The meeting therefore formulated definite proposals for action by each country which will in the aggregate ensure that the sterling area as a whole will be in balance with the rest of the world in respect of the second half of this year, 1952. These proposals involve a variety of methods, this or that designed to suit

such absolutely different economic systems and economies as those of Ceylon and Australia. From what my colleagues told me, I am sure that these proposals will be endorsed by the Commonwealth Governments concerned.
There was one unfortunate absentee owing to his taking part in an election, and that was the Finance Minister of India, Sir C. Deshmukh, but he is coming here next week and he is hoping to confer with the British Government and myself. I have also invited the Finance Minister of the Irish Republic to come to London early next month, and he has accepted my invitation. When these two further conferences, with the Indian Finance Minister and the Finance Minister of the Irish Republic, are concluded, then I shall, and the Government will, have the picture completely in our minds.
If each of the members of the Commonwealth succeeds in carrying out the proposals, as I am sure we shall, then we shall stop the drain on the gold reserves in the second half of this year. This is a formidable task which we have all undertaken. If each of us does our bit, taking into account the measures that were brought in last November—that is, the big import cuts, which are not fully operating and the effect of which we have not yet fully felt on the reserves—it means that we shall reduce the deficit from an annual rate of £1,450 million in the second half of 1951 to zero in the second half of 1952. But this is only the first step, for in future years we shall have to proceed from this balance with the rest of the world to a surplus to enable the gold reserves to be built up again. What we are concerned with is the stability of the currency, and this is the whole meaning of the statement which I have to make to the House today.
That was the picture before the Commonwealth Ministers, and I now have to give to the House some idea of how we are going to carry out our part of the bargain. What is this country to do in this great Commonwealth enterprise? Our task in particular is to reduce our deficit with countries outside the area to £100 million in the second half of 1952. The proposals which my colleagues the Finance Ministers of the Commonwealth and the other sterling area Governments are undertaking would provide them in


the aggregate with a surplus of £100 million with the non-sterling world in the same period. This would mean that the whole sterling area would balance its accounts with the rest of the world. That is the plan we have agreed upon, and that is the plan we must carry out. The United Kingdom's task in this is formidable, but the House should remember that we are the banker and the custodian of the central reserves of the sterling area. We cannot flinch from our task. We must prove ourselves worthy of it, and we cannot afford to fail.
Let me show by figures how great this task is. In the last six—I repeat, six—months, ending 31st December, 1951—that is, less than a month ago—the United Kingdom had a deficit with the non-sterling world of no less than £575 million. In the six months ending 31st December, 1952, we must reduce this deficit by £475 million to minus—that is, a deficit of—£100 million. In addition to this, we must have a surplus, as we normally do, with the rest of the sterling area, leaving the non-sterling world on one side. That must be of at least £100 million in the same period, so that overall, with our surplus with the sterling area and our deficit with the outside, we shall be paying our way. That is the task to which the House should address itself.
The constructive approach, and by far the most important for the long term, consists of measures which will increase our earning capacity. Later on, I shall be announcing some measures expressly directed to increasing our exports. The House will remember that last time I talked in this way, it was mostly concerning import cuts. This time, a good deal of what I have to say is to encourage the exports, so as to earn more on the plus side.
These exports, helped by increased supplies of steel from the United States of America, for which we must express our great gratitude, should ensure a substantial increase in export income in the latter part of the year. We have also just made another satisfactory agreement. It has been announced only within the last 24 hours that plans have been made for the sale of 25,000 tons of rubber to the United States for strategic stock. The United States authorities have agreed to pay for all of it on the basis of their

present buying prices, so that the sterling area will receive from this sale, in a very short time, well over £8 million in dollars.
It has been agreed that the purchase for stock which both we and the United States authorities would have made in this period will not be affected by this particular sale, and there need therefore be no disturbance to the normal working of the rubber market, upon which we depend for very considerable earnings of dollars and other foreign currency for the sterling area; and for that we shall be grateful also.
Then, we can reasonably expect that under the North Atlantic Treaty we shall receive help from the United States towards some of the burden of defence which we are undertaking in the common cause. Meantime, the House will have noticed that the United States Government have just announced that as an interim measure of support for defence, they have allotted to this country 300 million dollars of economic aid from the provision already made by Congress for the current year. That is in support of our defence programme.
To this extent, therefore, there is a definite sum of aid in prospect, though the House should observe that this will take some time to flow, since it is linked with our imports of dollar materials for defence. I do not doubt that the House feels as grateful as the Government and I do to the United States Government for their recognition of the value of our defence effort. We have also taken account Of this support of our defence plan in making our general plans.
But the House should be under no illusion that this will not be enough, and much of it will not come quickly enough. Since it is imperative that we should stop the drain on our reserves as quickly as possible, I must have recourse, in order to stop the drain, to the first set of measures which I shall announce, which means further cuts immediately in our imports and external expenditure so as to save foreign exchange. Unless we make these cuts, there would not be time for the other measures to take effect.
In making these cuts and economies, there are two overriding principles that we must observe. First, they must be made in such a way that industry does not lack essential raw materials. If we allow machines to run down for lack of


raw materials, we deny ourselves and our workers the only possible means of effecting recovery. Second, in view of the need of maintaining the strength and morale of the population as much as possible in present circumstances, the basic food rations must, if possible, be kept up.
On 7th November I announced certain cuts in external expenditure to the tune of £350 million. These cuts will take some time to become fully effective, but I fear that as £170 million of them was in foodstuffs, their impact will become progressively more apparent in our shops and in our lives from now on. It is very important that anybody bearing responsibilities as I do should make himself quite clear to the House and to the public. When that impact happens, these cuts will have an effect, because they will substantially reduce our deficit with the non-sterling world in the latter half of 1952. It is now clear, however, that we need a further saving of about £150 million, making total savings of no less than £500 million in external expenditure per annum.
It is not easy to find such essential savings without damage to some part of our economy. We shall in some cases have to use stocks acquired for the stockpile in order to reduce the current level of imports. [HON. MEMBERS: "Oh!"] This sacrifice is necessary because we are bound to halt the drain in the gold reserves, and we must keep our production going full blast if we are to earn what we need. What I can say is, though, that as a result of this operation, taking commercial and strategic stocks as a whole, the reduction in 1952 will be within perfectly reasonable proportions.
We fully recognise—and I am trying to set out the case to the House because we are all taking part in this housekeeping together—[Laughter.]—or, if we are not, we should be—we fully recognise that any use of stocks for current purposes is a once-and-for-all operation and this makes it all the more necessary to carry out our other proposals resolutely and in good time. For well recognised reasons, I cannot give details of the exact make-up of the £150 million. In any case this should be regarded with the £350 million as one single operation.
But there are one or two specific items I can mention, and I come first to

tobacco. This is a commodity where it seems, without damage to production or the health of the people, we could make large savings. I want the House to listen to one or two arguments I am going to put forward.
Tobacco is a commodity which brings in very large amounts of revenue and less than 7 per cent. of the price of cigarettes in the shops represents expenditure on imports—less than 5 per cent. on imports which have to be paid for in dollars. Thus, if any savings in our dollar import bill were to appear as a cut in consumption, we should be releasing purchasing power over 20 times as great on the home market and so increasing inflationary pressure, which it is our aim to remove.
Nevertheless, despite these considerations—which any human Chancellor must take into account, because this is by far the winner in the horse race for the collection of revenue for any Chancellor of the Exchequer, as my predecessor well knows; it has got beer beaten hollow, and the Purchase Tax and everything else—nevertheless, some saving of dollar expenditure there must be. My right hon. Friend the President of the Board of Trade has had some discussion with the people concerned and, as a result, it has been found possible, by a careful re-arrangement of our proposals in connection with stocks and other methods, to achieve a saving of the order of £22 million this year without reason to expect an undue shortage.
I then come to tourism. On 7th November I announced a reduction in the tourist allowance from £100 to £50 and we have now decided, with great reluctance, that it is necessary to cut this further. The allowance for the year to November, 1952, will therefore be reduced to £25. This second cut should yield a saving of the order of £12,500,000 this year. Further details about allowances and so forth will be announced afterwards, but some adjustments will have to be made with the Scandinavian countries over Uniscan.
Then coal. We have decided to reduce our purchases from the United States, and the savings here, as these purchases were of a small order, will be only £2,500,000. But this is a thoroughly healthy step. This country must export, and not import, coal.
Now I shall deal with two other items, one where we cannot, and one where we do not, propose to take action. The first is films. We have dollar expenditure on these at the rate of £9 million a year. As the House is aware, we have undertaken to the United States films interests that we will allow remittances at this rate and this agreement runs until September. We therefore cannot take any immediate action in this field owing to our being bound by this agreement, but I must warn the House that we shall use the time before then to consider the economies which may well have to be made in the future.
Now on petroleum; only about one quarter of the total consumption of petroleum products consists of motor spirit. A good deal less than half the consumption of motor spirit is by private motorists, and not very much of this is used for pleasure motoring. The only means of securing significant savings would be by imposing petrol rationing. The House by now must be fully aware of the complexities and expensiveness of working any petrol rationing system. We have considered this again, very fully, bearing in mind the fact that 2,500 people were needed to run the previous system at an administrative cost of well over £1 million, and even then it was subject to grave abuse.
I have investigated this with my colleagues, very closely, and we have come to the conclusion that all this effort would bring in only £4 million in this year, 1952, and £8 million in a full year. We have therefore decided that the whole thing is not worth while. [Interruption.] I do not think it is worth while spending nearly £1,500,000 in administrative expense to bring in only £4 million saving in foreign exchange. At any rate that is our decision, and I am sure it is the right one.
How are these proposals—those of November and those made now—likely to affect our lives generally? They will be a major contribution to solving the balance of payments difficulties of the sterling area as a whole, and such a contribution cannot be made without sacrifice. I have said that we plan to maintain essential supplies to industry on an economical basis. Furthermore, our present proposals do not involve reducing the basic rations on which the material for agriculture—namely, the 5,500,000 tons

of coarse grain supplies for food—depend, but in many ways our daily lives will be progressively affected.
In food we shall find that there will be considerable reduction—and I must warn the public of this—in a great many foodstuffs which hitherto supplemented our basic rations and gave variety to our diet. [Interruption.] The most important of these are canned hams, meats—[An HON. MEMBER: "Red Meat?"]—canned fish, fruit and vegetables and certain fresh fruits. In addition to this, the allocation of sugar and oils and fats to the manufacturers was reduced last November and this will mean less cakes and confectionery in the shops.
In the field of manufactures, there will be much lower imports. The most notable items affected directly are clothing, furniture, carpets, shoes and toys. We are also expecting considerable reductions in imports of items not subject to restrictions. I should like the House to note, however, that we are not now putting further or new restrictions on imports from Europe, because we want to maintain what remains of inter-European trade as free as we possibly can, and as a two-way traffic.

Mr. Harold Davies: rose—

Mr. Speaker: Order. The hon. Member must not remain standing if the right hon. Gentleman does not give way.

Mr. Davies: The right hon. Gentleman has now been kind enough to give way. It is an important point. I should like to ask the right hon. Gentleman how this inter-European trade is going to affect the E.P.U. payments. Is there any likelihood of losing—[HON. MEMBERS: "Oh."] Hon. Members may say "Oh," but it is an important point. If there is an adverse balance with us in some supplies, shall we still have to move gold into the European pool?

Mr. Butler: At the present moment, owing to the scale of our indebtedness to the European Payments Union, we are approaching the moment when we shall be paying our debts in gold; that is the reason we had to cut our imports. But I do not want to go further, unless I am obliged to do so by the seriousness of the position, in cutting our trade with Europe or with France. I think we have done a great deal. I do not wish to go further than we have. As it is, the cut


in tourism will be deeply felt on the Continent.
To sum up, we have put into operation a programme of import cuts which, in conjunction with the measures to increase earnings and with defence aid from the United States, will, we believe, enable us to carry out the commitments I have made to the other Commonwealth Finance Ministers—provided that there is no turn for the worse in the economic weather.
I must point out that we have assumed that import prices remain much the same as they are now and that there is no major change in the world economic situation. If there are such changes, and they affect us adversely, we shall nevertheless maintain our resolution to do what we have undertaken. But this would mean further cuts in external expenditure and would probably entail reductions in rations. I give that warning in case things go worse.
As I have said, the cuts we have made are essential because the money in the till is running out very fast and we must stop it at all costs. But I have mentioned that our objective is not to pay our way at a low level but as quickly as possible to increase our earnings and so fulfil the part which we should play in the world. In order to build up our earning capacity overseas, we must free industry from some of the demands made upon it by the home market and clear the ground for a bigger volume of exports.
One step that the Government can take in this direction is to reduce the amount of money available at home to buy the products of our industry. The first steps to check the supply of money were taken last November when the Bank Rate was raised and stiffer conditions for lending were introduced. The clearing banks, whose co-operation I want once again to recognise, were asked to look very hard at requests for advances, and in general not to make them for capital expenditure. A further direction for a severely critical review of capital issues was made public. There is no doubt that the change of emphasis represented by these measures is already having its effects, and that these will now move right through the economy.
Another step is to reduce Government expenditure, which now takes a big share

of the country's resources. I therefore turn to a number of measures the general effect of which is to reverse the trend, which has now been continuing at varying rates for several years, for civil Government expenditure to increase year by year, and thus to reduce the proportion of national income devoted to this purpose.
It may be urged, and is urged by some economists of various schools, that there is little connection between Government expenditure, for example, on social services and the balance of payments. This is a complete misunderstanding of the true position. Every pound spent by the Government means either a direct call on man-power and materials or a transfer of income to someone else, who is thus enabled to make such a direct call. Our fundamental task is to increase the resources available for export, and this cannot be done unless we are willing to release them from the other calls made upon them. Besides, constantly increasing taxation has required the maintenance of absolute levels of tax so high as seriously to check incentives to work and to enterprise.
My colleagues and I took office at the season when Estimates are being prepared. Ever since, we have bent our efforts to reducing the Civil Estimates. I doubt whether anyone who has not been in office realises, as my predecessor the right hon. Member for Leeds, South (Mr. Gaitskell) certainly must, how great is the natural tendency of Government expenditure to increase. Added to this natural tendency is the rise in prices and wages. In recent years civil expenditure has risen on an average by nearly £100 million per year, and this despite a steady falling off of residual expenditure from the war.
Leaving aside Civil Defence and other quasi-military items which appear in the Civil Estimates, we are holding other Government expenditure at about this year's figure, the exact figure having still to be settled when the Estimates are printed. This is a major achievement. The rise in wages and prices between the two years is about 10 per cent. All that has been absorbed. It means a fall in the proportion of the country's gross national product which the Government take for their civil expenditure from about 15 per cent. to about 13½ per cent. That has already been achieved.
It has not been an easy task. We have cut out waste, but that is not enough. We have also had to reduce or slow up many useful services. In doing so we have tried to preserve the structure of the great Government services and to make economies by delaying developments that could wait for better times, and doing without some of the less important things. I am not going into detail now. The Estimates will do that, and the House will see for itself. I will only mention the principal measures which we propose, of which the House should learn at once. Hon. Members should not under-rate the accumulation of economies which we are achieving in every branch of the public service just by patient attention to detail.
Before I come to the main economies, there are two small but still important cuts. The first is to reduce the Civil Service by 10,000 in the next six months at a saving of about £5 million, and to aim at a further reduction in the following six months. The second is to reduce the Information Services by £1·2 million a year, of which £700,000 will fall on home services and £500,000 on overseas services.
Next I come to education. The Minister of Education has been accused of dreadful things on the score of her recent request to local education authorities to reduce their forecasts for next year by about 5 per cent. overall. Watching, listening and reading of the hue and cry which has been going on, I have wondered at the lack of faith of many of my own educational friends. This Government has always believed with Disraeli that, to use his words:
Upon the education of the people of this country the fate of this country depends.
The Minister of Education and the Secretary of State for Scotland will maintain the essential fabric of education. In particular we do not propose to change the period of school attendance. But surely there is some room for economy without doing vital damage to the service. The necessary measures will include economies in the school building programme and a number of other savings, mainly administrative.
We do not propose to discharge or to cease recruiting teachers, and anybody who knows about education knows that that is the major expense in education—

salaries. We need the teachers and we value their services. We need them in order to cope with the increasing number of children coming to school and the increasingly large size of classes. In order to meet difficulties in school building, particularly the shortage of steel, which is affecting this building programme like everything else, the Minister of Education proposes to ask authorities to make more economical use of school premises and to have more flexible arrangements in the age of transfer to secondary schools. Similar action will be taken by the Secretary of State for Scotland. This is better than cutting the school age at the top or sending children to school later.
In the National Health Service special measures are needed. We shall keep the cost of this Service—excluding Civil Defence expenditure borne on the National Health Service Votes—within a ceiling of £400 million. We shall maintain the structure of the Service, but we shall make charges where they can best be borne.
Our predecessors, in the shape of the present Opposition, very conveniently left behind them legislation, out of which I do not propose to be manœuvred, enabling a charge to be imposed on prescriptions. This is not a case of stealing the Whigs' clothes; it is rather a case of stepping into the shoes of the right hon. Member for Huyton (Mr. H. Wilson). We shall use this legislation to make a charge of one shilling on prescriptions. This will bring in £12 million in a full year. Where there is hardship, help will be given in meeting this or other charges. The details are being satisfactorily worked out by my right hon. Friends the Minister of Health and the Secretary of State for Scotland.
Now I come to the dental service. The dental service has done excellent work, though it is by common agreement now in an unbalanced state. There are far too few dentists and the attractions of the general service have lead to a depletion of local and school services. Dental work is not being done where it is most needed. At present in the school service, taken as a whole, there is only about one dentist to every 8,000 children. This is a shocking condition. We must get the supply and demand into balance and make sure that the demand of those who need help most gets the preference.
With this as much as with economy in view we shall impose a charge of £1, or the full cost if less, for all treatment except dentures, where a charge is already made, but this new charge will not apply to children or to expectant and nursing mothers. This should free more dentists' time for the local and school services. Thus we are putting first the needs of the priority classes, including children. This will bring in some £7½ million.
At the same time we shall impose some other minor charges. There will be a charge for some appliances such as surgical belts and boots, hearing aids, and wigs when these are supplied through the hospital service to out-patients. Amenity beds, so-called, in hospitals will cost more. The powers of local authorities to charge for the use of day nurseries will be extended. These and other charges should bring in just over £20 million in a full year. My right hon. Friend the Minister of Health will give full details about these charges in due course. As legislation will be required, there will be ample opportunity, of which hon. Members will doubtless avail themselves, to discuss the undoubted merit of these proposals.
Before leaving the social services, I will say this in general. All the steps I have announced are sincerely designed to preserve the scope and purpose of the various measures, while correcting or avoiding abuse or faulty emphasis. [HON. MEMBERS: "Nonsense!"] The real danger to the social services, as anyone who has seriously studied the position knows, comes from the threat of bankruptcy. This it is our major objective to prevent and so save the services as a whole.
Let me for one moment deal with defence expenditure. This is not the occasion to go into detail on it. The Government mean to carry out as quickly as we can the defence programme started by our predecessors. We cannot do so without a strong and healthy national economy. It was fully recognised by the Temporary Committee of the Atlantic Council, which recently reviewed all countries' defence efforts, that the success of any country's defence effort, including our own, depended upon the balancing of its external accounts, and

their ability to obtain important raw materials.
As the Prime Minister explained to the House before Christmas, our defence production programme has been to some extent delayed. That is partly due to certain shortages such as skilled labour, machine tools and essential materials. The increased supplies of steel we shall be receiving later in the year from the United States will be of great help. The lag has also been due to the inevitable holdups in matters of design and production planning which afflict all large arms programmes. I need hardly add that we have applied to the Service Estimates quite as rigorous a drive for economy as I have described in connection with civil expenditure.
In particular, in re-balancing our defence effort we have had two main objectives; to ensure that for the money we spend we get the maximum value in effective power so that we may carry out our contribution to N.A.T.O. and to support our world-wide commitments and to increase as quickly as possible our exports of engineering goods by easing the immediate burden of defence on the metal-using industries.
This brings me to a discussion of our plans for investment. The main problem concerns the output of what I have just described under defence, the engineering industries, for which defence, exports and home investments are all competing. This is the portion of the economy on which there is the greatest strain, and unless we can relieve it we cannot hope to get the exports we so vitally need. It is absolutely vital that the output of these industries should be increased, but shortage of steel will continue for a little time to limit the speed at which this expansion can take place.
But it is clear that, however successful the effort may be, this section of our economy must still have a most difficult task in meeting in full all the claims I have mentioned. We must therefore take steps to ensure that the most important claims are met first. That means restricting certain types of home investment as well as consumption in the interests of exports.
I take building first. There is an acute shortage of building steel, which limits the number of jobs requiring steel which can be carried out during the coming year.


Moreover, owing to the importance of the other demands for labour, we cannot allow the size of the building labour force to grow above its present level.
We must not forget that provision must be made for some increase in building work for defence and the fuel and power industries. In addition, the Government intend to carry out their pledge on housing, which uses comparatively little steel. The amount of building which can be carried out this year should be considerably greater than last year, and probably greater than in 1950. A tight control will have to be kept on all types of building using steel which are not of fundamental importance to the national economy. Shops and offices will be particularly affected, and the programmes for rebuilding the blitzed cities, I am very sorry to say, will have to be further delayed. [HON. MEMBERS: "Shame!"] Well, it is a good thing that the House should know the bad parts as well as the good.
At the same time, work on some industrial projects of high long-term value to our balance of payments will have to be slowed down or stopped altogether, and the start of a large number of similar new projects will have to be postponed. This is inevitable because factories and factory buildings generally are large users of steel.
I turn now to plant, machinery and vehicles for civil use. Our objective is to reduce total home deliveries of plant, machinery and vehicles for civil use by £150 million to £200 million at current market prices below the level attained in 1950. The House should know that this severe and unwelcome step means on the average a cut of no less than one-sixth of actual supplies in 1950—and even in that year the supplies which industry and agriculture got fell short of what they would have liked to buy and what is really needed in the long-term interests of our economic progress.
In making this cut we must, so far as possible, protect basic essentials such as the fuel and power industries, but even for these expansion cannot be indefinite. Some reduction in home civil demand for plant and machinery should follow from the withdrawal of initial taxation allowances as from next April, which was announced by my predecessor

a year ago, and from the tighter credit policy which I introduced last November and which will be maintained.
I should like to make a special appeal to industry and agriculture in general to limit and, where possible, postpone its demands on the engineering industries. The Government are relying on the engineering industries themselves to do everything they can to push forward overseas orders and thus ensure that a larger proportion of their output goes to export, because that is a vital thing for the balance of payments. We shall be discussing with particular industries the appropriate division between their exports and the home market.
We shall ask the motor industry, which, as everyone knows, has been preeminent in the export field, to release only 60,000 cars and 60,000 commercial vehicles to the home market; this compares with actual deliveries to the home market for this last year of rather more than 110,000 cars and about 100,000 commercial vehicles. This is a hard and unpleasant thing to do—and will, I fear, be felt to be so, more than appears at present—for it is upon the continued development and modernisation of industry that our overseas earning power must in the long run ultimately depend.
In the short run, however—and I hope the House will remember those debit figures with which I opened my remarks; the debit balance of the United Kingdom especially, and of the sterling area as a whole—we are faced with a critical situation that demands at almost any cost a rapid increase in our exports, and we can confidently rely on securing such an increase only by stepping up our exports of capital goods, since the markets for most other types of manufactures are distinctly uncertain.
In addition, we must also lighten the domestic load on the engineering industry by restricting the supply of the metal goods which we buy for our personal use. Cars I have already dealt with. But there are also motor cycles, bicycles, radio and television sets, refrigerators, washing machines, vacuum cleaners, metal furniture, sports goods and so on Supplies of these goods for the home market will be limited this year on the average to about two-thirds of last year's level.
In money terms this is equivalent to a reduction of some £70 million, excluding Purchase Tax. Many of these things make life easier and pleasanter—they are part of the higher standard of living. But we cannot have unlimited access to them if they or other things made in their place can be sold abroad to pay for the food and raw materials that we must have. I hope the House will see that we are in earnest in increasing our exports and limiting our imports.
First, we shall discriminate, in order to achieve these things, openly in favour of exports in the allocation of steel and other scarce materials. Thus, consumer goods industries have already been put at a low level in the allocation of steel for the first quarter of the year.
Second, if it is necessary in exceptional cases to reinforce steel allocation we may have to prohibit the supply to the home market beyond a certain level. Thus where goods cannot be exported it may be necessary to reduce output, so that resources can be transferred to other products which can be sold overseas.
Third, an order will come into force this week to restrict hire purchase on such things as motor vehicles, bicycles, radio and television sets and electric appliances. Credit restriction will also limit hire purchase, which is essentially a form of living beyond one's means. [HON. MEMBERS: "No."]
I must here say a word about the allocations of steel. I know there are many who feel that the allocations of steel for this quarter do scant justice to their performance and efforts in the export field, and they hope that their efforts will progressively receive more encouragement in the way of steel supplies. A move in this direction—although not as far as we should like—will be made in the allocations for the second quarter which we shall try to get out to industry as soon as possible in order to help manufacturers to plan ahead. Thereafter, we hope for deliveries of the United States steel, and that, I hope, will ease the position.
All the varied measures I have described are designed to free resources for the expansion of our export trade, which is vital for our survival. If we do not earn more we shall have to bring

more in and cut more imports of food and vital materials. The Government's primary responsibility is to create the necessary conditions to enable industry to concentrate its efforts on that purpose. In general, we shall rely not on any battery of direct controls but on the enterprise and determination of industry and its voluntary co-operation with the Government. Thus, as I have already said, we shall hope to agree with industry, section by section, as we have done in the past, what proportion of its output is to be devoted to export in this new drive. This is particularly the case in the engineering industry whose contribution to our exports has been so remarkable. I have mentioned the value and importance of capital goods.
In the case of other exports, conditions are not so easy. With the best will in the world we shall not be able immediately to push up at all substantially our exports of such materials as coal and steel which are of obvious importance, but plans are afoot, and the spirit of the miners is excellent. Their production is first-class and it must be clear to the country that any exports of coal are quite vital to our economy and are of far more interest to the Chancellor of the Exchequer than money at the present time.
I know that in recent months particular difficulties have been experienced by Lancashire and the textile industry—that is, by our industries making consumer goods, particularly the textile industries. These difficulties have arisen partly from the working of the Purchase Tax arrangement for those classes of goods for which there is utility manufacture.
In view of the serious problems involved, my predecessor appointed some months ago a Committee under the Chairmanship of Sir William Douglas to consider the whole range of questions arising from the connection between utility schemes and Purchase Tax. The Report of this Committee has been received and will be published on 24th February. The Government have considered, in the light of the recommendations contained in this Report, what action they should take to deal with problems which have arisen, particularly those affecting the export trade. We shall be submitting our proposals to the House in the very near future.
Exporters may ask whether they should concentrate on certain overseas markets in preference to others. My right hon. Friend the President of the Board of Trade will be speaking later and I do not propose to give any extra guidance in this statement except to say that exports to the dollar area must continue to come first.
The story would be incomplete without a reference to manpower. Many industries, particularly in the engineering field, are short of labour. This problem has been the subject of special consideration by the National Joint Advisory Council and the special steps we are taking have their agreement. I am making this statement by agreement with my right hon. and learned Friend the Minister of Labour.
The essential thing is to ensure that workers who may have to change their jobs should know where their services can best be used, and should not go into less important jobs when they would be prepared to take more essential work if they knew of it. In order to help with this, the Minister of Labour is today making an order under Defence Regulations requiring employers seeking to engage workers to do so by notifying their vacancies to a local office of the Ministry of Labour, and to engage only workers submitted by a local office. There is no intention of attempting to compel workers to take jobs they are unwilling to take. No directions to workers are to be used at all. They will be told of the important vacancies and asked to take them willingly. If they are not willing to do so, their names will be submitted for vacancies in other work of the kind they desire.
That is the end of my account of what the Government are doing and what they expect industry to do to encourage exports and to meet our difficulties. These measures must not be looked at individually or in isolation. They are all part of a general plan: they all contribute, though in different ways, to our one great aim today, which is to enable this country to pay for what we have to import and to stand once more on its own feet. If we fail in this we fail in everything else: in defence, in housing, in full employment and in social welfare; moreover we fail to maintain our position at

the centre of the Commonwealth and Empire.
Whether we like it or not some people have got the impression that the United Kingdom economy is soft, and that there will be no real return to confidence until, both at home and abroad, people really feel that we are getting down to fundamental remedies. I believe that the plan that I have outlined does get down to fundamentals; and I am much encouraged to think that my view is shared by the Finance Minister of the Union of South Africa whose most helpful statement reported today we all applaud.
In all this we recognise that all our efforts will be brought to nought unless we are successful in dealing with the problem of inflation. This leads me to an important statement with which I conclude. The measures which I have outlined can be brought to their logical conclusion only within the framework of a Budget. Hon. Members will, I know, not expect me to be specific at this stage about the contents of the Budget.
I can point out, however, that if legislation is necessary to carry out any recommendation arising out of the Douglas Committee Report this can be done only in a Finance Bill. Besides, it is becoming increasingly important to announce the detailed proposals of the Government for introducing an Excess Profits Duty. Moreover, the interests of the balance of payments, which are paramount to this country, make it essential to introduce the appropriate Budget at the earliest possible date and thus complete the third stage in the operation which I began in November.
It is vital that the country and the world should understand the spirit of urgency and resolve which inspires the Government. I had not intended to open my Budget until late in April, but the needs of the situation demand exceptional measures. We have therefore decided that the date will be 4th March. I feel sure that everyone will interpret this exceptional move—for which there are few precedents, in this sense—and will realise that there is much I cannot do here and now outside a Budget. The purpose of the Budget will be to round off the economic policies which we have adopted, and to ensure the conditions under which the people can, given the will, pay their way.

Mr. C. R. Attlee: When we asked that this statement should be made today and that we should not embark on a debate immediately, it was because we thought that this was really in the nature of a Budget statement when one requires to consider the matter as a whole. I do not propose to put any specific questions now, but I reserve the right of the Opposition to consider the whole matter in detail, indicating that we are as concerned as anybody else to see stability in the finances of this country.

Mr. Deputy-Speaker (Colonel Sir Charles MacAndrew): I understand that an arrangement was made that there should be a break after the statement of the Chancellor of the Exchequer. Mr. Speaker gave his approval to that arrangement as there is to be a two-day debate starting tomorrow. Therefore, we had better proceed to the Orders of the Day.

Orders of the Day — HYDRO-ELECTRIC DEVELOPMENT (SCOTLAND) BILL

Order for Second Reading read.

5.6 p.m.

The Joint Under-Secretary of State for Scotland (Mr. McNair Snadden): I beg to move, "That the Bill be now read a Second time."
This is a short Bill. Its purpose is to increase from £100 million to £200 million the statutory limit on the amount of borrowed money which the North of Scotland Hydro-Electric Board may have outstanding at any time. The Board has already been authorised to borrow up to nearly £94 million of the permissible total of £100 million. That £94 million has not yet actually been borrowed by the Board. The total borrowed to date is only £56 million, but the balance between that figure and £94 million is earmarked for works already approved.
Further schemes both for the generation and transmission of electricity have been submitted by the Board for confirmation. Other schemes are in preparation and, as hon. Members know, the work of the distribution of electricity is going on continuously. Consequently, further provision for borrowing is essential.
As the House knows, the Secretary of State has to consider in a judicial way schemes submitted to him for confirmation, but in the normal course it would appear that borrowing consents for the additional £100 million, for which it is now proposed to make provision, will have to be issued to the Board during the next three years or so. Of course, the money will only be taken up by degrees in accordance with the Board's approved investment programme, but when a scheme is approved provision for borrowing to meet the cost must be made.
The existing power of the Treasury to guarantee the Board's loans will extend to the increased total mentioned in this Measure. I need hardly stress the useful contribution which the new hydro-electric works of the Board are making towards bridging the deficiency of electricity supplies without the use of coal or iron. The installed capacity of the new hydroelectric schemes now in operation is 282,900 kilowatts, and it is estimated that


the annual output, when they are fully operated, will be of the order of 767 million units.
Other large schemes are in course of construction and, as I have indicated, still more schemes are planned. Even more important, as I think hon. Members will agree, is the contribution made by the Board to the amenities of life in the Highlands and also to the urgent national task of countering depopulation as well as of possible development in these regions. In the four years 1948–51, over 76,000 new consumers were connected up to the Board's system, and, out of that total, more than 54,000 were in rural areas.
Clause 1 (1) raises the limit of loans which the Board may have outstanding at any time to £200 million. The present limit is imposed by the proviso to Section 47 (2) of the Electricity Act, 1947, at £100 million, and subsection (2) provides that any additional sums required by the Treasury for fulfilling any guarantees of the payments of interest or principal of any of the Board's loans, brought about by the increase in the Board's borrowing powers, shall be charged upon the Consolidated Fund. Clause 2 sets out the short title of the Bill.
I hope that, with that short explanation, the House may see its way to facilitate the passage of this Measure, which I commend to the House.

5.12 p.m.

Mr. A. Woodburn: I am quite sure that the House has listened to the very brief and rather formal presentation of this Bill with some interest, but it may be thought that, after the rather gloomy and tragic picture which has been placed before us in the last hour, this comes as a different type of subject, and not one which should interest the House very greatly.
I would submit, however, that there is something cheering in turning from a policy of restriction, forced upon us by circumstances beyond our control, to a picture of further development which is going to make a very big contribution to the solution of the very problems that we have been discussing. It is not very often that hydro-electric pioneering projects in Scotland are subject to examination by the House, and I think that it is well worth while to devote a little time to seeing what this body is actually doing and what purposes have been effected.
I myself have had a rather intimate connection with it since the very beginning. I was Parliamentary Private Secretary to the right hon. Tom Johnston when he took the Bill through both Houses of Parliament. It went through in the period of the Coalition Government, and not one Amendment was either made or moved against it. It was carried through by agreement, and, therefore, it is not a matter of party controversy. From the point of view of Scotland, it is certainly one of which we can be justly proud.
If we look at what has happened in other countries in connection with hydroelectric schemes, such as the Dniepiestroy dam and the Tennessee Valley Authority project, and we remember the wide publicity which they received, it is appropriate that we should expect to hear what developments are taking place in our own country. It may be said, and, indeed, it is quite obvious, that the House has often found itself in the position of not knowing what is going on in our own country.
These operations, both physically and metaphorically, bring us light and hope, and this scheme is one the benefits of which, both from the human and material point of view, are not fully appreciated by many people, who take a rather distant interest in them. The population of this country has been increasing quite considerably, but, in contrast to that fact, the population of the area which will be covered by the activities of this Board has decreased by 25 per cent. in our own lifetime. This is a loss of a population which is extremely valuable. It is not without some basis of truth that it is claimed that this population, in proportion to its numbers, has made a greater contribution to the well-being of the world than any other population in the world.
Mr. Speaker himself is a witness to the distinguished places to which Highlanders have been called, and, in every part of the world, we find people with Highland names playing important parts in administration and in government. One can recall many who acted as advisers to Shahs and other potentates and who bore Highland names. In the Army also, we frequently find that people who have been playing a distinguished part in the Army have also borne Highland names, because many people from these parts of


our country have made a career of serving in the Army.
In the 200 years during which committees have been sitting and putting forward schemes for the benefit of the Highlands, it is true to say that no committee can compete with that presided over by Lord Cooper in the extent to which realisation has followed the promises it made, because, not only have the promises they made been fulfilled, but, already, they have been more than doubled.
The granting of this additional power to the Board to borrow up to an extra £100 million is not a philanthropic gesture on the part of this House, but it is one of the most profitable of investments which the State has ever made. It is not a speculation. The Board has already been able to meet all demands in the way of charges on its loans without requiring a subsidy from the State, and, in that direction, it is quite distinct from many other projects which have been carried out in recent times.
The main purpose of the Board is to produce electricity, and that electricity is being produced, but, in addition to that main purpose, the incidental benefits are not less important. Indeed, they are of really great importance, from both the human and the material points of view. In the solution of the problems which have just been outlined to us by the Chancellor, everyone will agree that the fundamental problem facing us is the expansion of our supplies of fuel and power. The solution of all our problems is, in reality, the raising of greater exports through greater production of power for our industries.
That is our main problem, and the easiest, cheapest and most efficient way of meeting that problem quickly is by the speedy construction of hydro-electric plant for the production of electricity. I think it can be described literally as power from heaven. Hydro-electricity can not only save coal in the production of electricity, but greatly reduce the amount of coal burned in the transport of coal for the production of electricity.
Already, I understand, the hydroelectric scheme is saving over 500,000 tons of coal a year in this country, and, with the further schemes which have

now been approved, I am informed that we shall be able to save up to 2 million tons a year, and that, within 10 years, this figure may be increased to 4 million tons a year. When that is achieved, there will be no problem, and it will appear that electricity is coming to us from the sky itself.

Mr. Gerald Nabarro: I am very interested in the right hon. Gentleman's figure of the potential saving of 4 million tons of coal in a decade. Would he give us an indication of what exactly the capital cost for hydro-electric schemes would have to be to effect that saving?

Mr. Woodburn: That would have to be worked out in relation to the charges. I am talking of charges which, after allowing for the payment of interest charges, make this still the cheapest electricity which can be produced in this country today, and which can bear comparison with any steam producing unit.

Mr. Nabarro: Would the right hon. Gentleman confirm that point and tell us, for instance, what is the capital investment cost per kilowatt of power generated by a hydro-electric scheme, as compared with that of a steam generating station?

Mr. Woodburn: I do not think that is the point, because with a steam generating station the capital expenditure has to be liquidated over a very limited period of time. With a hydro-electric scheme, on the other hand, much of the capital expenditure is liquidated over a considerable period. Therefore, what one has to deal with is not the initial capital expenditure, but the annual charges which arise from it. Steam generating stations, which may go out of date, cannot be compared with hydroelectric schemes where the water power is perpetual. Atomic energy may come and dispense with steam generating stations, but it will not dispense with hydroelectric stations because, once the stations are built, water power is even cheaper than the production of atomic energy.
When it comes to cuts in capital expenditure—and I hope the Government will pay special attention to this in regard to hydro-electric schemes—the question of such cuts in the Highlands is quite a different proposition from that of cuts in other parts of the country because the


construction labour in the Highlands cannot be transferred to other activities in the same way as can be done in a populous area where industries exist. It would mean depopulating the Highlands—the removal of large sections of the population—and from that point of view, so far as construction is concerned, hydroelectric schemes do not interfere or compete with defence activities as do steam generating stations.
I realise, of course, that the manufacture of the necessary plant is not all done in the Highlands; it is done in areas which compete with defence expenditure. Some of it is done in England, some in Scotland, and some even abroad. But the manufacture of such plant certainly competes less with defence expenditure than does the equipment for steam generating stations. I would point out to the Government that the production of electricity by hydro-electric schemes is quicker, cheaper and of much more advantage to the country. These advantages alone should be sufficient reason for supporting this Bill, but the incidental advantages are no less important.
This is the one part of Britain which is capable of great expansion in regard to the production of meat, a matter which I know is very dear to the heart of the hon. Gentleman who introduced this Bill. Nobody who knows anything about meat production would pretend that such an expansion would be either easy or quick. We must establish the foundations for such an expansion in the Highlands. The necessary foundations are a population on the land and capital improvement of the land.
The basis of population in the Highlands is, of course, the home, and the woman is the centre of the home. My experience during my time at the Scottish Office, both during and since the war, was that the women in the Highlands are not going to live in outlying places unless they are supplied with water, roads and some of the other amenities available in the towns. The State has already gone a considerable way towards meeting these requirements: Parliament has approved grants up to £20 million for water supplies, and the hydro-electric scheme has made a very big contribution towards opening up the Highlands by the provision of roads.
It is already producing electricity for farms. I believe that something like three-quarters of the farms are already receiving a supply. The bringing of electricity to the farms gives the farmer machinery for his work and his wife machinery for her home. It gives her heat in the home and the opportunity of using a washing machine, an electric cooker, a vacuum cleaner, wireless and even television.
I know that there is a great deal of sneering at television today. I do not know whether that is justified or not, but I have had some experience of the Highlands Film Guild. That Guild brings films into the Highlands in order to give the people there some of the amenities available to people living in the towns. Whether we like it or not, one of the attractions of the towns for young people is the cinema, and I take it that that fact guided the Chancellor very considerably today in his attitude towards the films. The Highland Film Guild gives at considerable expense a very devoted service to the people of the Highlands.
Those who operate these film units have to travel the roads in all sorts of weather, but even when they reach a village, the people wishing to see the films have to travel many miles on foot, sometimes through the snow, to see the show. The hon. Member for Caithness and Sutherland (Sir D. Robertson) knows that in his constituency that is frequently the case in bad weather. One thing the women of those parts demand is that there should be transport to carry them to and from the villages. My hon. Friend the Member for the Western Isles (Mr. M. MacMillan) reminds me that many of these women have to carry their provisions on their backs for many miles and sometimes even their sick before reaching a road on which there is wheeled transport. The only service which has been able to overcome that difficult is the Highland aeroplane service which transports sick people to hospital.
The other incidental contribution which the hydro-electricity scheme can make is the possibility of bringing new industries to the Highlands. This has been a very difficult question. The last Parliament, or the one before it, made a regulation extending the development benefits to an area in the Highlands. Everyone has


been disappointed that private enterprise has not been attracted by these benefits to establish to any great extent industries in that development area. During the last Parliament I suggested that it was desirable, if private enterprise was not prepared to take the risk, that the Government should take the responsibility for developing some industry in that part of the Highlands.
Cheap electricity is available there and the necessary sites are also available. A very useful social purpose could be served by industries going there. The only industry which it has been proposed to set up there was one which would consume practically all the electricity produced by the scheme and which provided practically no employment for the people there. It also wanted a big subsidy. That would be the wrong kind of industry to be set up there. The industries which go there must clearly be suitable for the area and must conform to the normal habits of the life of the Highlands.
This scheme has had effects outside its own area. It has brought new industries into Scotland. For example, hydro-electric engineering was not highly developed in many parts of our country, but there are now a number of firms, which formerly had no experience of the work, who are now able to offer their services to other countries, and this will provide an additional possible export. The Hydro-Electricity Board has developed in conjunction with the firm of John Brown and Company of Clydebank, the makers, gas turbines for the production of electricity. That, again, is an industry which might be capable of expanding our exports in the future.
Beyond that, in the Orkneys, where gales caused such destruction recently, it is hoped to harness the wind to make electric power. If the scheme for wind power is successful it will be the first of its kind in the world to succeed. The American one was destroyed by the wind. If we can develop the "know-how" in the production of electricity by wind power we shall have accorded ourselves another opportunity for utilising Nature for the production of power in this country.
When I was Secretary of State I set up a committee under Sir Edward

Appleton to investigate the possibility of winning peat. So far as we can see at the moment, the closed-cycle gas turbine will utilise peat. If that is possible we shall have another opportunity to save coal for other purposes. The Industrial Revolution in our country started very humbly with the water-wheel. Alongside our rivers, both in Scotland and in England, we still see very many relics and traces of the industries resting upon the power of those water-wheels.
I think the two biggest stopped running five years ago in Ayrshire. They were 50 ft. wheels providing 250 h.p. Just as they have given up duty we now have water coming into service again with the hydro-electric scheme. I understand eventually something like 10,000 million kilowatt hours can be obtained from water that formerly used to rush down to the sea and be lost to us.
I should like to pay tribute to Lord Cooper and his Committee. Few people who have presided over such committees have had the satisfaction of seeing their recommendations come to fruition. Speaking from memory, I think the Committee estimated about 400,000 kW. capacity might be produced from water power. We are already exceeding 900,000 kW. and I believe that with the present installations that output can be increased.
I think, also, that my late chief, Tom Johnston, the former Secretary of State for Scotland, who was the guiding spirit of this scheme from the very beginning, and is still controlling its destiny, deserves tribute from everybody in Parliament and from the whole of Scotland for the devoted service he has rendered.
Another name which ought to be mentioned, that of a man whom we have lost very recently and who was not so well-known to the public, is that of Sir Edward McColl. I never met anyone who knew the Highlands so intimately, and not only from the point of view of electrical development. He knew the spirit of the Highlands. The devotion and energy he applied to recovering this power from the Highlands were something which inspired everybody who came in contact with him. We all regret his passing. I should also like to pay


tribute to the staff. There are many inducements for them to leave Scotland and go to other concerns but, so far, they have kept to their jobs.
At the time, great fear was felt that the beauties of Scotland would be destroyed by the coming of the hydro-electric schemes. But nobody who has seen the new loch in the constituency of the hon. and gallant Member for Perth and East Perthshire (Colonel Gomme-Duncan) can doubt that instead of lessening the beauty of the countryside it has further increased it.
But we must not make the mistake now that was made before the war. Everybody must regret that this work was not carried out before the war when it could have been done at a third of the cost. We know all the reasons for the objections to it. The coal interests thought they could not sell their coal and, therefore, they did not want to deprive themselves of this outlet for coal. There were interests who opposed the work on public grounds for other reasons, but if the work had been done then we would now be enjoying electricity at a price cheaper than that at which it will ever be produced in the future, as far as we can see.
The production of electricity and coal governs the question whether the population can live in this land. I was very interested in a speech made by the hon. Member for Kidderminster (Mr. Nabarro) some time ago on the utilisation of fuel and his calculations that would keep the production of electricity and coal in harmony. I think he will agree that this scheme meets his objection and that when these works are established they will not need the coal he thought would not be available for steam-producing stations. The "fuel" for this purpose comes in the right quantity at the right time of year for us in Scotland.
As far as we are concerned this project is not a matter of controversy between parties and hon. Members. We can support this Bill with the feeling that no money was ever better or more wisely spent and no money was spent from which one could know with such certainty that there would be such ample and good returns.

5.37 p.m.

Colonel Alan Gomme-Duncan: In following the right hon. Gentleman the Member for East Stirling (Mr. Woodburn), with whose remarks I find myself entirely in sympathy on all important matters, I still feel that a word of caution is necessary in passing this Bill, which I am going to support. The point which should be borne in mind is that we all want hydroelectric development in Scotland. There has been a lot of misrepresentation about my hon. Friend the Joint Under-Secretary of State and myself and our attitude to the Tummel-Garry scheme. We were supposed to be opposed to hydro-electric development, whereas we were supporting it and merely wanted certain things changed.
Nobody in the Highlands of Scotland with any sense in his head wishes to oppose the development of hydro-electric power; but it is a matter of fact that thinking opinion in Scotland is becoming perturbed at the enormous increase in the actual cost of these works over the estimated figure put before Parliament.
As an example, I quote the case of the undertakings at Loch Sloy, Loch Morar and Lochalsh. It will be seen from HANSARD of 2nd July last year that I asked the Secretary of State for Scotland what was the original estimated cost of these projects, and he told me that in 1944 the estimated cost was £4,600,000 for the three schemes. He then gave the expenditure on these schemes up to the end of May, 1951. It had risen to £9,043,000 and that was after two parts of the Morar and Lochalsh scheme had been withdrawn. He also told us that the estimated cost of completion, less these two comparatively small parts which were postponed, would not be less than £9,235,000. That is but one example of the enormous excess of the actual cost of carrying out these schemes over the estimates that we approved.
While we do not wish to hold up the development of hydro-electric schemes in any way—far from it—we must not overlook the question of cost in these desperately serious times. Giving the option of increasing the limit of borrowing powers—topping it up by £100 million—may perhaps have the effect of making people think: "There is plenty of money available, let us go ahead and spend it."


That is a grave danger. I do not think people will do it intentionally, but it is an attitude of mind which might prevail where there is a great deal of money which can be borrowed, and particularly where it is double the amount one could borrow before. I hope very much that far greater care will be exercised by the Secretary of State for Scotland and his Office in the examination of the actual cost to see whether it cannot be kept closer and more nearly related to the estimates.
The example which I have given is only one of many. I do not think I am wrong in saying that if one asked the Secretary of State for Scotland for similar figures for the other schemes, we should find a similar increase. Of course, nobody will pretend that the cost of things today is likely to be the same as it was in 1944, because the cost of everything has gone up; but that does not absolve us from our duty of looking much more closely all along the line into the actual cost of these schemes, in which I am sure reasonable economies could be effected without doing away with the efficiency of the schemes, which we all heartily support.

5.41 p.m.

Mr. J. Grimond: I want to make only one or two short points on this Bill which, like everyone else present, I support. The development of the Hydro-Electric Board has been one of the most notable things which have happened in the north of Scotland. It has stimulated in many districts a feeling that some of the pleasanter things available in the towns and the South would come their way and that attention would be paid to them by the Government, and that Scotland itself was doing something to help these great unpopulated areas from the Tay up to the north in my own constituency. I hope that the Board will continue to expand their work as fast as they can.
I think that the provision of some of these pleasanter things is a very important step in arresting de-population. Also, as has been said, the provision of electricity relieves the housewife of a good many unpleasant jobs and does a great deal to help the farmer and the crofter. Therefore, whatever happens to this Board is a matter of great and personal

importance to many people in an area which is facing rather difficult problems and at the moment is suffering by reason of the fact that it does not derive any benefit from the re-armament programme but is at the same time suffering to some extent from the high prices and the general economic difficulties of the country as a whole.
In my own constituency the Hydro-Electric Board is somewhat inappropriately named because it generates none of its electricity by water. It generates the major part of it by oil and a small amount by wind. The time may come when electricity will be generated by the movement of the tides, and when that times comes the hon. Member for Caithness and Sutherland (Sir D. Robertson) and I may be able to meet on a great barrier running from South Ronaldshay to Caithness. Those days, however, are to come.
I should like to make one point on the subject of oil. I cannot understand why the oil companies cannot move oil cheaper in bulk by sea up to Scotland and thereby reduce the freight charges on oil. I do not see how it can be impossible to move oil comparatively more cheaply in a tanker taking it up to, say, Lerwick or Kirkwall or Wick, or wherever it may be, than by moving it by rail or by road. Yet I think we pay extra for all grades of oil, and the increasing cost of oil is one of the things which forces the Hydro-Electric Board to come to the House and ask for new borrowing powers.
In the early days the promises of electricity were rosy and many crofters got their houses wired. The cost of wiring a house is no small matter to a crofter. Then, because of the scarcity of materials, the rise in prices and so on, it became necessary to curtail the free provision of electricity, and in some cases guarantees were asked from the crofters that they would use so much electricity a year. I can understand the reason for that and I can understand the difficulties of the Board.
The Board are supplying a great many scattered crofts, and the cost of erecting poles and carrying cables to those crofts is considerable. We have heard of an old lady in the constituency of the hon. Member for Ross and Cromarty (Mr. John MacLeod) who only uses the electric light in order to light her oil lamps. She switches on the current, and when she


has lit the oil lamps she switches it off again. On the other hand, there are areas in the Highlands where electricity is being used on a large scale and we must surely expect that as it becomes a more normal thing, more and more electricity will be used in the crofts for agricultural and ordinary household purposes.
There is no doubt that there is a feeling of unfairness between crofter and crofter because one man who has had the misfortune to come into the scheme late is asked to give a guarantee that he will use so much electricity, while another man who came in earlier has not been asked to give a guarantee. That has happened in many cases in my constituency. I do not say it is the Board's fault but, as I said at the beginning, this is an important matter for the Highlands, and if we can assist in overcoming the feeling of unfairness, we should do so.
I understand also that people are now being asked to contribute the initial cost of carrying electricity to their houses. That, I think, is something new. If we could get a statement on what the future is likely to hold in this respect, it would be a great help to the people. Some have spent large sums of money on wiring their houses, and now they do not know whether they will be required to give a pretty substantial guarantee or else make a fairly substantial contribution towards the cost of carrying electricity to their crofts; in the end they may be unable to do it and their expenditure may be wasted; while others eagerly await electricity which has not materialised.
Those are some small points which I wanted to raise on this Bill. I join the many other hon. Members who have said that it is very important that this great development in the Highlands should continue. It should be given every possible facility by this House bearing in mind the condition of the country as a whole.

5.46 p.m.

Mr. Malcolm MacMillan: I have been greatly interested to hear the all too brief statement of the Under-Secretary of State for Scotland followed by the more expansive speech of my right hon. Friend the Member for East Stirling (Mr. Woodburn). I find myself in agreement with the suggestion that we should not in any way frustrate the ambitions, schemes and general programme of the North of Scotland Hydro-

Electric Board. I do not think anybody in the House wants to do that.
Members on both sides of the House have criticised aspects of particular schemes at different times. I have done so myself, just as the hon. Member for West Perth (Mr. Snadden) has done on other occasions. However, we should not castigate other hon. Members too severely, because we all feel strongly at times about certain aspects of different schemes. I suspect, however, that in one or two cases other private and commercial interests may occasionally have obtruded themselves—I am not referring here to the hon. Member for West Perth—but I will leave that for the time being.
I do not share the view which has been expressed that the schemes for the distribution of electricity will mean the maintenance of a large labour force permanently in the Highlands. As the various schemes are completed, there will be a skeleton maintenance force, which will not amount to anything like the forces required for ordinary steam generating stations. On the other hand, there is the compensating point that we shall not have these continuing costs that we have in connection with a steam generating station. Once the water power schemes are completed and fully under way and are eventually linked up with what I may call the general hydro-grid system, the costs do not recur. The costs are relatively stable once the water is doing its job. I admit that the cost of oil for the diesel engines will be a consideration at all times in the smaller schemes.
In the meantime, I do not want to over-stress the importance of these projects from the permanent employment point of view. There will be a number of clerical workers, technicians, maintenance crews and so on, but do not let us be misled by some of the too glib statistics about de-population which have been related to the activities of the Hydro-Electric Board, because to some extent the number of people imported to these jobs has helped to put a temporary check on the figures for emigration and depopulation. They do not really reflect a real trend.
On the other hand, one has to be grateful to the Hydro-Electric Board for their activities in the Highlands and Islands in creating employment for these few years while setting up their generating


stations. One has to pay tribute to the late Sir Edward MacColl, to Mr. Tom Johnston and to all those who had the vision, the capacity and the continuing interest and energy to push these schemes ahead in face of considerable criticism both in this House and certainly outside it.
I can well remember the amount of opposition there was to hydro-electric development from coal area interests in various parts of the House. I remember that we were finally given a completely free vote and could get no guidance from the Government or the Ministers on the Caledonian Power Scheme and other schemes. Looking back on these things, it all seems rather shameful now. The criticisms we had and the opposition were rather those of vested interest than of people who took a different national point of view. Today, however, everybody in the House pays tribute to the development of hydro-electric power under the Board and to its distribution not only in the Highlands but also in the service of Scottish industry.
Having paid that tribute to Tom Johnston and the Board's workers and staff—and having paid it without any reservations—I will nevertheless say that I cannot fully agree with my right hon. Friend the Member for East Stirling in one respect. What he said may be generally true of the larger schemes; but not of the smaller schemes. The Board have not lived up to some of the early promises they gave and the expectations they raised in respect of smaller, so-called "uneconomic schemes." They were pledged to bring service to areas which could never by themselves make it economic, and which were to be carried by the whole scheme.
Consider the case of some of the islands in the west. I well remember Sir Edward MacColl, buttressed by all the authorities at the time, saying in 1945 that by 1949 some 90 per cent. of the population of the islands would be served by electricity for lighting and power. But that has not happened, and it is no use pretending that it has. When my right hon. Friend the Member for East Stirling said the Board had brought light "both physically and metaphorically," I was inclined to substitute the word "hypothetically" for a large number of the

smaller islands. The hon. Member for Orkney and Shetland (Mr. Grimond) spoke about the old lady in Ross and Cromarty, looking for the electric light switch in order that she might see to light her lamp, but I saw the picture the other way round—a picture of the old lady going round with her lamp looking for the Hydro-Electric Board and the electric switch. I know of islands with populations of a few thousand who were led to believe that by 1949 they would be part of the 90 per cent. of the population who would be switching on electric lights and using electric cookers.
Another point arises from the Chancellor's statement today. If we are to economise in the use of steel and to direct the allocation of steel supplies to our export industries and to re-armament, will this Bill mean what it says?

Mr. Nabarro: The hon. Gentleman may not have heard the Chancellor of the Exchequer, who said that he excluded the fuel and power industries from the steel cuts.

Mr. MacMillan: I heard the Chancellor's statement excluding the fuel and power industries from the cuts, but how far will it be possible to carry out his presumably good intentions? One is surely permitted to question how far it will be possible to carry out the programme and whether the Hydro-Electric Board will be able to continue to make their heavy priority demands on steel, cement and several other materials which are so essential to our industrial export drive and to the re-armament drive. One is entitled to question whether they will be able to continue at the pace shown over the last few years. I hope they will be able to do so and, with priority given to the fuel and power industries, that they will receive the necessary allocations.
Reverting to the consumers, I am very anxious indeed to know what is to happen to those people who want to install electric cookers or to buy electric irons and generally to make use of electricity. It is no use installing electricity without providing the gadgets for using it—and the Chancellor of the Exchequer did not say anything which would exclude those gadgets from these very severe cuts. Indeed, he said the opposite. It is bad


enough that Scotland should face an ever-increasing Purchase Tax on all the pleasant amenities enjoyed in the south, like television, just at the moment when these amenities are coming northward within her grasp. It appears to me that millions will have to wait for years for the enjoyment of those new amenities. As soon as television is to be transmitted from Kirk o'Shotts, we find that we are not to have television sets. Can we have any reassurance regarding new consumers?
The hon. Member for Orkney and Shetland made the point that the Hydro-Electric Board now demand that crofters and others who want electricity installed shall pay a considerable fee—often equal to several years' rent—or guarantee to use a cooker and so many units of electricity per quarter. That happens in my part of the country, in the Western Isles. In some cases the charge is very heavy, partly depending on the amount of distribution work involved, the distance from the main lines and so on. It is a new charge which has not been imposed hitherto, and those who had the good luck to have electricity installed years ago did not have to pay it. Anybody who wants electricity now, after having waited all these years and perhaps having wired his house, has to pay that charge unless he guarantees to use quite a large number of units per quarter.
I do not know what is the solution to this problem. I agree that the Board have to meet ever-increasing costs, far higher than was envisaged in 1944 or 1945 and higher than anyone could have foreseen at that time, but should they all be borne by the new consumer, now being supplied with electricity? It is hard on the crofter or the fisherman on a small income—so small that he is often outside Class 1 National Insurance benefits altogether—if he has to pay the full cost of his installation and heavy consumption. What can we do to ease the misfortune of these people? These costs that have been piling up against the Board are apparently to be passed entirely to the new consumer.
I fully recognise the benefits brought by electric light and power to the crofts and farms throughout the Highlands. There is only one thing we should welcome more than light, and that is water. The two things are, certainly, separate

matters; and I ought not now to pursue the matter further. But, in passing, I hope that water supplies are not to suffer as part of the cuts announced by the Chancellor, especially when we are considering the needs of these areas.
My right hon. Friend the Member for East Stirling painted a very pretty picture of the benefits of electricity and told us about the films provided, and about Mickey Mouse. We would much rather have a good water supply. But Mickey Mouse is quite a consolation. Such things place a temptation in the way of young people of the Highlands and Islands who see all the nice things which the people of the towns are enjoying. They want those things, so the spread of electricity perhaps tends to hasten the desire for the city and for city lights. To that extent, therefore, it may be a service and yet at the same time may carry some of the germs of emigration.
With electricity, I should like to see these much-mentioned industries being brought to my constituency. I have not yet seen one. The right hon. Gentleman the Member for East Stirling says the industrial revolution started with water. I can only regret that it ended with Purchase Tax as far as my constituency's Harris Tweed industry is concerned. I do not blame him entirely for that, although he has his share of the blame on the basis of collective responsibility of Governments.
I can only hope that hon. Gentlemen opposite, now they are in power, are still doing their best to push these new industries they agitated for in recent years into the Highlands and Islands. They have far more influence with private industry than have members of the Labour Party. I want to see industries go into the Highlands and Islands and I am sure the appeals of the Highlands Panel, local authorities and Lord Bilsland's Scottish Council will receive the support of everybody on this side of the House if the new Government go on to develop new industry. Let them drive on with the projects for which they have always asked—those based on electricity included—which now apparently are to be cut instead to the bone. Let us see if they can solve the problem. We will give every encouragement and aid.
None of us will oppose this Bill. We shall all support it, even with the caution


uttered by the hon. and gallant Member for Perth and East Perthshire (Colonel Gomme-Duncan) in mind. We recognise the advantages that could accrue to agriculture; and also to new industries—if we can get them—in the Highlands. The hon. Member for Caithness and Sutherland (Sir D. Robertson) has gone on boldly but alone with this sort of enterprise. He has shown courage compared with other industrialists who have said that they wish to see new enterprises in that area but take no personal risks. Anyhow, that is a good start.
As I say, we all welcome this Bill, but, unfortunately, one of the things because of which so much of our support in this House was given to the hydro-electric scheme in 1945 and since, that it would bring all these incidental benefits—that it would assist in the development of industries, serve every small community, and so on—has not come about so far. Therefore, I conclude by making a plea to the Board—a plea which, I hope, other hon. Members will reinforce—to look after the smaller places, as the large places tend to be much more able to look after themselves.

6.1 p.m.

Major D. McCallum: The hon. Member for the Western Isles (Mr. M. MacMillan) and the hon. Member for Orkney and Shetland (Mr. Grimond) have raise points upon which I also feel a word should be said. I refer particularly to the Board's installations in crofts and smallholdings in fairly recent times. Some of those crofters and smallholders have been faced with the difficulty either of the cost of wiring or of a guarantee demanded from them, or some charge of one sort or another. I do not know whether other hon. Members have had this experience, but I certainly have had many complaints about that sort of thing. I wrote to the General Manager of the Board. I found him most helpful. I pointed out particularly the hardships that these charges imposed in some cases, and some compromise was usually reached, or the claim by the Board was even waived, and the crofter was satisfied: and I hope that the Board were, too.
The hon. Member for the Western Isles raised a point which has been filling me with anxiety ever since the Chancellor of the Exchequer was speaking and my hon.

Friend introduced this Bill. We listened for over an hour to a very grim story from the Chancellor of the Exchequer, and I, like the hon. Member for the Western Isles, cannot quite see how, immediately after the Chancellor's statement, the Government can introduce a Bill for extending the loans which the Board can obtain by another £100 million. Will it work out? [An HON. MEMBER: "They will not spend it."] No one could be a greater supporter than I of these schemes—

Mr. Woodburn: But the point is this. Naturally, the Chancellor of the Exchequer wants to take steps to improve and increase our exports. That depends on coal. Anything which saves coal is a contribution to the solution of the problem.

Major McCallum: I thank the right hon. Gentleman for that intervention, but in his speech just now he mentioned that, in addition to other benefits of the development of hydro-electricity schemes, there would be benefit to beef and mutton production in the Highlands. I know that in various parts of the Highlands the Chancellor's edict about the restriction of credit has come as a very serious blow to hill farmers raising cattle and sheep—a very serious blow. In fact, I know of several going out of business because of this restriction. How does that tally with the purposes of this Bill? How can we afford to give the Board powers to borrow another £100 million when we cut down on the very thing that is more essential even than electricity—that is, food supplies? That is what fills me with wonder.
I am sure that the Bill will be passed, and I hope that the Board will get the iron and cement and steel and all the other things which they want for their developments. We have just had an announcement about a big scheme being developed at Loch Awe, but I wonder whether the Chancellor's restrictions will not limit the supplies of materials required for these schemes.
Again—and also as the hon. Member for the Western Isles said—what about the cookers and radiators and the electric irons and those sorts of things? Are we going to get them? I sincerely hope we shall, but that very question occurred to me as I listened to the


Chancellor of the Exchequer making his statement and then to my hon. Friend immediately afterward moving the Second Reading of this Bill. As I listened to the Government in almost the same breath talking about restrictions and about extending the borrowing powers of this Board, it seemed to me to be queer.
My hon. Friend the Member for Kidderminster (Mr. Nabarro) raised the question of the thermal stations and capital expenditure on hydro-electricity. I have had it on the best authority—unfortunately, he has passed to another world, and so I cannot question him on it now—that, no matter what thermal scheme we introduce, electricity can be produced by the Board 17 per cent. cheaper—at any time, whether in 1945 or 1950 or 1960. My hon. Friend is an expert on these matters, and he will, perhaps, pull to pieces what I say; but that is what I have been told on the best technical advice.
I fully agree with the hon. Member for the Western Isles about the question of the population. What is disturbing me is this. For instance, where is the labour to come from for the Loch Awe scheme? Will it be attracted away from sheep and cattle raising? Will the agricultural workers required by the hill farmers be attracted away from the farms to such a scheme? Shepherds and cattle men could get much better wages temporarily working on those schemes than the farmers are able to pay them.
Will those schemes draw that labour away from the farms and leave the hill farmers without sufficient workers? This affects the vital question of beef and mutton production. I feel that this is not a question of increasing the population but of taking away the men who are required essentially for the hill-farming industry. I am sure that the Board have had this matter brought to their notice, and I hope that they will try to get foreign labour—Poles and Irishmen, and so on—to deal with these schemes.
I am quite certain that as the years go by the disturbance by these schemes of the countryside will be cleared up, and, so far as the beauty of the countryside and amenities of that sort are concerned, I do not think there is any danger. There is nothing like the danger there that there

is of taking away the population already in the Highlands.
Another point about which we are very anxious is one about which the hon. Member for Orkney and Shetland asked a Question today, and that is the matter of the freight charges in the Highlands. Surely, the development of hydro-electricity is one way of solving that difficulty. If we could do away with the importation of coal into the Highlands, and depend only on electric power and peat power, that would be of enormous benefit to the Highlands and to their population. There would be not only a saving on thermal stations and coal transported to them, but on coal for the ordinary domestic consumers. The problem of freight charges is one of the most serious that we have to contend with in the Highlands.
I hope, and I feel quite sure, that this Bill will receive unanimous support in the House today, but I should like to call the attention of my hon. Friend the Joint Under-Secretary of State to this question: How comes it that we can give the Board power to borrow another £100 million and at the same time cut our credits which were being given to the hill farmers to produce mutton and beef?

6.10 p.m.

Mr. John Rankin: It is quite clear from some of the speeches that there is a good deal of confusion in the minds of hon. Members about the impact which the Chancellor's speech will have on the implementation of this scheme, and the question which presents itself to some of our minds is, I think, a quite legitimate one: In the long run will this money be spent? We know that we shall get more steel from America; but we also know that that steel will cost us £26 per ton more than it can be sold at in this country.
That is bound to result in an increase in costs, which will send up, not merely the cost of new stations and production but also, ultimately, the cost of distribution. It will certainly affect the amount of electricity which will be consumed—the amount of necessary electricity which ought to be consumed in the Highlands if we are to achieve that development which we all want to see.
It was also argued, again, quite reasonably, that these schemes would cut coal


consumption, and that we might therefore export that coal. The difficulty about that argument is that these schemes are long-term schemes; they will not solve our problems tomorrow. We need the extra coal for export, not next year but this week. Therefore, while I agree that these schemes will, in the long run, save coal for export and, therefore, help in our general economic position, that is not an argument which seems to be applicable to the immediate circumstances facing us today.
However, I rose, not to tread on the tails of other coats, but merely to make a point which has so far not been touched upon. In support of my hon. Friend the Member for the Western Isles (Mr. M. MacMillan), I should like to point out to the hon. and gallant Member for Perth and East Perthshire (Colonel Gomme-Duncan), who deplored the way in which the costs of many of these schemes had risen, instancing Loch Sloy and the Glen Affric scheme, that when one sees the conditions under which these works have been carried out one realises that the job has been so enormous that it is astonishing that the costs have not exceeded estimation even more greatly.
The Hydro-Electric Board have had to meet great opposition from local vested interests, and the town of Pitlochry affords a shining example of the type of vested interest which has helped to contribute to those additional costs to which the hon. and gallant Member objects.

Colonel Gomme-Duncan: Would the hon. Gentleman not agree that, when dealing with enormous sums like this estimates should be very much closer to reality, and that the conditions about which he now talks should have been foreseen?

Mr. Rankin: The Chancellor, this afternoon, referred to the difficulties as they presented themselves to him, which are appreciated by many of us. He was faced with that very problem, that of rising costs; and he gave instances of how it had affected estimates in spite of all they had done to try to control these things. The Hydro-Electric Board is no more exempt from that pressure than any other spending body.
The point to which I wish to direct attention, very shortly, is the need for preserving the identity of the North of

Scotland Hydro-Electric Board. I make that point because there has arisen a feeling that other plans are in view for this authority, and I feel that the Government ought to take this opportunity to make it perfectly clear to the people of the Highlands and to the Board that there is no intention of attempting to interfere with its functions. The only guidance we have so far is the word we got some weeks ago from the right hon. and gallant Member for Kelvingrove (Lieut.-Col. Elliot), but, however highly we estimate what he says, I am sure he will agree that the authoritative word lies with the Government Front Bench, and I think we ought to be told that there is no intention of interfering with the identity of the North of Scotland Hydro-Electric Board.
Many of us believe that that Board has to perform the type of job which can only be performed by an ad hoc authority. It is different from the other two electricity authorities in Scotland, who are concerned solely with the distribution of electricity. The North of Scotland Hydro-Electric Board is concerned with producing electricity and also with distributing electricity. In addition, it has done great work in the development of amenities in the Highlands; it has created roads, and it is laying the foundations of forestry schemes.
In other words, because of its peculiar nature it was specially constituted for the development of the Highlands of Scotland, and that should remain its function. Because of that, it is not concerned solely with the physical work of creating more electricity for power. It has also concerned itself with other developments; not only of bringing industries to the Highlands, which is important, but of fostering the indigenous industries which will flourish in the Highlands—one of the most important aspects of the whole problem of Highland development.
The Hydro-Electric Board has been doing that type of work, and it would be disastrous for the Highlands if its work were merged in any other functional body. I hope that tonight we shall have from the Government an assurance that such is not their intention.

Sir David Robertson: Will the hon. Gentleman give us some examples of the industries in the Highlands which have been fostered by the North of Scotland Board?

Mr. Rankin: So far as I am led to believe by the Chairman of the Board, one of their great jobs has been creating those roads in the Highlands which are essential to afforestation schemes. The hon. Gentleman may disagree with that, but I had the privilege, on one short visit, I admit, of seeing quite a number of the schemes, and I did see some evidence of road development there.
I should be astonished to know that it was easy to develop re-afforestation of the Highlands without road development preceding it. Then again so far as I am aware from my talks with the Chairman of the Board, they have done something towards encouraging the development of agriculture within the Highlands. The hon. Gentleman will not disagree, I hope, with the general proposition that we ought to be trying to encourage the development of these industries which might be termed indigenous to the Highlands of Scotland.
I hope that we may have tonight some assurance from the Government that there will be no attempt to interfere with the North of Scotland Hydro-Electric Board and with its functions or powers. Like other Members I welcome this Bill, and although I wonder whether money will be spent, nevertheless, the money is being set aside for a purpose which will find no note of dissent in the whole House, and I take this opportunity of commending the Bill.

6.23 p.m.

Sir David Robertson: I have some criticism to make about the operations of the North of Scotland Hydro-Electric Board, but I want to be a kindly critic, although an absolutely truthful one.
I fully appreciate the tributes that have been paid to the Board, to its Chairman, and particularly to Sir Edward McColl, a very great electrical engineer, and a Highlander, whose imagination and drive did so much to bring this Board to the position that it is in today; but I should not like the House to overlook the real pioneers in Highland electricity—the late George Balfour, who was so long an honoured Member of this House and who was Chairman of Balfour, Beatty and Co., and his four Scottish partners—William Shearer, William McGill, Ian Murray and Sir Andrew McTaggart.
Those were the men who created and brought electricity into the Highlands. Those were the men who waited for 11 years before they paid a dividend at all. They walked the streets of London trying to get capital for the venture. I would not like them to be forgotten when we are paying just tribute to their successors. These men made the most remarkable contribution ever made in the Highlands of Scotland by the introduction of electric power.
The hon. Member for Tradeston (Mr. Rankin) talked about the industries which the Hydro-Electric Board has fostered. I say that it has fostered none. There is a compulsion on it under the Act to do that, but that has been one of its failures. This story about building roads to foster industry will not do. Roads are built for the Board and for no other purpose, and when the construction work is finished and the roads are no longer required they may be of some help to us in the Highlands, but do not let any of us imagine that they to get into that frame of mind.
There is under the parent Act a compulsion on the Board to encourage and foster industries in its area. I challenge the Minister who is to wind up today to tell us of one or of any which it has fostered. In my area, which is a considerable part of the North of Scotland, there are none at all. If the hon. Member for Tradeston wants me to give way I will.

Mr. Rankin: I am glad that the hon. Gentleman has given way. I did not really mean to interrupt him, but I take advantage of his generosity. I think that he is only stating the problem that the Government are up against. What I did say was that the Hydro-Electric Board had fostered industries by creating the basis on which the industries must thrive, for instance, road and afforestation schemes, and so on. At the same time, if these things are to develop we have to attract the individual to the Highlands, and that brings in other aspects of our difficulties and has created the whole problem which, I think, the North of Scotland Hydro-Electric Board has been facing up to very well.

Sir D. Robertson: I have stated my case very clearly.
I have asked the Minister who is to wind up to name any industry that has come into my area or any other Highland area, because I do not know of any. It is the duty of the Board to do that, but the Board has failed in that respect. It is compelled under the parent Act to give priority of power and light to consumers in the North of Scotland area; they have not done that. The great bulk of units of electricity produced are going to the South. Connections that have been made in the area have been mainly made in the populous areas, and do not let us overlook the fact that there are many important cities in that area. In my own constituency, the eastern coastal belt has had some connections, but where are the connections in the remote areas?
I have had the greatest possible difficulty in getting connections made a mile or two outside the county town of Dornoch, just off the Great North Road, and even when the connections are made, although the parent Act stipulates that the communications will all be made free, the little crofters who earn an income of about £50 to £150 a year are called upon to pay a guarantee of £3 a year for a croft. I think that it is one pound a room. [HON. MEMBERS: "Much more."] That is more than the rent of the croft in most places, and it is fundamentally wrong and in my opinion a breach of the Act.
The farmers who are making such a magnificent contribution to the nation's food, and whose work has been interrupted very much by the tragic hurricane which swept through the North of Scotland a fortnight ago, are being asked to pay capital charges—the little farmer with 40 acres, £18 per year for 10 years, a capital charge of £180. That was never visualised in this House when the Act was passed. We were told that communications were to be free. That is a legitimate criticism, and I hope that the Minister who is to wind-up will tell us that he intends to deal with it. My charge is that the populous areas are getting electricity in the same way as they get telephones, when the men in greater need of both in the remote areas do not get them.

Mr. Woodburn: Is the hon. Gentleman aware that farmers in my constituency have to pay a contribution when they are

a certain distance from the road before they can have electricity? That applies all over Scotland. It does not apply only to the Highlands but to people in any isolated area.

Sir D. Robertson: The right hon. Gentleman's interruption is totally irrelevant. His area does not come under the 1943 Act.
I should like very much tonight to get the figures for the units exported to the south in the last three years and the units sold in the northern area, and I should like the latter to be sub-divided into the units sold in the rural portions and the other portions of the area. It may be that it is too much to expect the Minister who is winding up to supply them tonight, and if that is so I will wait a fortnight or a little longer and then I should put down a Question, which he can answer.
I take no parochial attitude over this matter. Nothing would give me greater satisfaction than to see Glasgow, Edinburgh and the south getting surplus electricity. The Under-Secretary of State, who opened the debate, said that electricity had arrested depopulation. That is not so. One of my counties, Sutherland, is the most depopulated in Scotland, and depopulation is still going on. Caithness is the second most depopulated county in the country. I say that the Board has lamentably failed in giving us the electricity that we require. Its transmission lines in course of erection remain unmanned or under-manned. It does not seem to want to take on extra men to do this work, yet we have unemployment in the area running at a rate four times more than the average for all Scotland. It is a thoroughly unsatisfactory position.
The right hon. Gentleman the Member for East Stirling (Mr. Woodburn) spoke about industries, and lamented that the development area which he himself created between Inverness and Cromarty was not populated by a single industry. He will recollect the plea I made at that time—that development areas ought to be created in the towns and large villages in the Highland areas, where people have lived for centuries and where they want to go on living. They do not want to go into a barren wilderness out in the fields of Cromarty. It was a failure, and I said it would be a failure. I am sorry


that my words came true, but the opportunity still exists. In Wick, the largest town north of Inverness, there is abundant opportunity for industry, with buildings available. In Thurso and Darnoch, two of the oldest towns in the United Kingdom, there is not a single industry.
Let me remind my hon. Friends on the Front Bench that no country or large area of any country can hold its population on an agricultural economy without industry. The whole history of the world indicates that agriculture and industry are twins, and if we are to hold our populations they must go on together. For a century Governments of various colours have been talking about the depopulation of the Highlands. This Government will have an opportunity of doing something, which very few of the others ever did, and I know that in spite of the crippling inheritance which they have taken on from their predecessors they will seize the opportunity.
I know a number of other hon. Members want to speak and I must conclude now. I have some other points here which I wish to make, but they can wait for another occasion. This much, however, I do say, that while I know that much has been done by the North of Scotland Hydro-Electric Board, nevertheless it is a fact that in some fundamental priorities it has failed to carry out the duties imposed upon it by the Act for the Highland area.

6.34 p.m.

Mr. Hector Hughes: The House will probably come to the conclusion that the speech of the hon. Member for Caithness and Sutherland (Sir D. Robertson) was of a rather carping character about a good Bill, which I can commend in view of the fact that it is well designed for the purpose for which it is intended. I support this Bill, and I think that the £200 million is not disproportionate to the very good work which is being done by the Hydro-Electric Board.
The purpose of the hydro-electric scheme is to bring light, heat and power to the North of Scotland, and the House will agree that it has done a good deal to improve the lives of the people there. One thing which is not being done I should like to suggest to the House, though I do not do it in any carping way.

The success of this Board is largely due, notwithstanding what has been said by the hon. Member for Caithness and Sutherland, to the devoted skill of men, who have spent their lives in its work, and notably Mr. Thomas Johnston. It is idle for the hon. Member to deny the success of this Hydro-Electric Board in the sphere in which it has operated.
The suggestion that I have to make is that hydro-electric power should be used for transport, which is a crying need in the North of Scotland. One of the great needs there is quick, cheap and effective transport. It seems to me that the electricity provided by the hydro-electric scheme might fairly be applied to the transport system of the North of Scotland. To put it shortly—I think the railways of the North of Scotland should be electrified. The North of Scotland suffers greatly through its geographical position; it suffers greatly because of the freight costs; and it suffers greatly because the products of that area have to be brought at great expense to the South, there to compete at high freight charges with the products of the South. The fish of Aberdeen, for instance, has to compete with the fish of Grimsby and Hull, which are very much nearer to the large consuming centres.
If the railways of the North of Scotland were electrified by the power from the hydro-electric scheme, that would do a great deal to assist trade and industry in the North of Scotland, and would be an appropriate use to which to put that electricity. I support this Bill, and I would support a Bill which would much more generously put funds at the disposal of the Board for the aim I have just ventured to adumbrate.
It may be said that this is not the time to electrify the railways. When is the time? I say this is the time to save coal; to provide transport facilities for our fish and agricultural products in the North of Scotland; to develop Scottish markets, and to populate or re-populate the Highlands. If this is not the time for that when is the time? Will that time ever come? It is revelant for me to make the suggestion to the Board through this House that some of the added funds which will be acquired under this Bill, and possibly under another Bill at a later date, should be applied to this desirable end.

6.38 p.m.

Mr. Gerald Nabarro: I shall probably be the only hon. Member of this House representing an English constituency who will intervene in a debate which concerns capital development schemes in essentially a Scottish area.

Sir William Darling: How does my hon. Friend know?

Mr. Nabarro: If my hon. Friend the Member for Edinburgh, South (Sir W. Darling), will wait a few moments, I shall demonstrate to him that this is a matter which is of very great interest to parts of the United Kingdom other than Scotland.
At the outset, I should like to temper with a little realism the idealism of the right hon. Gentleman the Member for East Stirling (Mr. Woodburn). In his useful contribution to this debate, he inferred that the capital development cost of schemes of this description is not a matter of over-riding or even major importance. I consider he is wrong in pushing to one side the capital cost element in a hydro-electric scheme. Nobody in this debate so far has attempted to draw a comparison between the capital cost of generating one kilowatt of power from a hydro-electric scheme in Scotland and the cost of generating one kilowatt of power from a power station in England, Scotland or elsewhere.
It is pertinent, as we are voting a very large sum of money, an extra £100 million of borrowing powers for capital development of Scottish hydro-electric schemes, that a direct comparison between these costs should be made.

Mr. John MacLeod: How does my hon. Friend expect the people of the Highlands to get this electricity? The cost of bringing the coal into the Highlands would be prohibitive.

Mr. Nabarro: Perhaps my hon. Friend will allow me to pursue my argument, and will return to the relatively minor point which he has made in a moment. I said it was essential to have a comparison made between the capital cost of hydroelectric development for power purposes and the cost of the power produced in a power station in England, or elsewhere. These are calculations which I have taken out since the commencement of this debate, without the aid of a slide rule. I

am sure that when read in HANSARD tomorrow, they will be found approximately correct.
Hydro-electric schemes in Scotland have cost about £94 million, and for that sum a total of 282,900 kilowatts of electric power is being provided which, on the basis of 1,000 kilowatts to one megawatt, equals 283 megawatts of electric power to date. That means that the installed capital cost of one kilowatt of power from hydro-electric schemes of Scotland is no less than ₣332.—[Interruption.] That is the capital cost, not the cost for a year of production, as my hon. Friend the Member for Edinburgh South suggests.
The Third Annual Report of the British Electricity Authority gives a corresponding figure of capital cost, taken as an average of the installation cost, for power stations in the whole of the area controlled by the British Electricity Authority. That area excludes the North of Scotland and the hydro-electric schemes. That cost is £50 per kilowatt installed. In other words, the cost is approximately one-sixth to one-seventh of the corresponding installed capital cost under the hydro-electric schemes.

Mr. Woodburn: The hon. Member is using words to convey a wrong meaning. What is the cost of electricity? In all capitalist industry it is the annual charge that liquidates the capital cost plus the cost of running. It may be, as the hon. Member has said, that the capital resources used for the establishment of a hydro-electric scheme at a given date require more cement and steel than in the case of a steam generating station, but the cost of electricity is calculated as an annual charge. The second point, on which the hon. Gentleman is either misleading himself or is confusing the House, is that he is taking hydro-electric schemes produced this year, with the present labour conditions and cost of production, and is comparing them with the average over the whole area of the British Electricity Authority, whose stations were built long before the war when labour and materials cost perhaps a quarter or an eighth of what they do today.

Mr. Nabarro: The right hon. Gentleman is seeking to misrepresent me. I can prove my point in a number of different ways. The fact remains that the


capital cost of installation for one kilowatt of power in the North of Scotland is of the order of six to seven times the corresponding capital cost in a standard power station elsewhere in the United Kingdom.
My hon. Friend the Member for Ross and Cromarty (Mr. John MacLeod) has asked how the residents in this part of the Highlands of Scotland are otherwise to get their power. I have no desire to deprive them of electric power, but the purpose of hydro-electric schemes in the North of Scotland is, as he well knows, not only to provide local residents with power and to attract industries to the area, but to export power to the Lowlands of Scotland and, what is equally important, to the North of England.
If the capital cost of developing power under a hydro-electric scheme is six to seven times greater than it is in a power station in England, then capital costs are of very great importance. That is quite aside from the question of providing local residents with power in the Highlands, which is, of course, of local interest.

Mr. Woodburn: I should like to clear up this point about the cost of the scheme. The production of hydro-electricity today, compared with electricity produced at a station built for steam, would be 30 per cent. cheaper, calculated on an annual cost basis. In a steam station, electricity would cost 50 per cent. more to produce than in a station like that at Loch Sloy, on a peak load basis. It may be that the cost of cement and steel at Loch Sloy would be more than for a steam station built today, but I do not think the hon. Member should try to alter the whole basis of capital cost in order to support his argument.

Mr. Nabarro: The right hon. Gentleman forces me to occupy the attention of the House for longer than I had intended. If he is not prepared to take the figure on the basis which I argued, perhaps he will allow me to put it in another and much simpler way. The Hydro-Electric Board have spent £94 million to date.

Mr. Snadden: It is not a fact that the Hydro-Electric Board have spent £94 million. That is the borrowing power. The Board have spent only £56 million.

Mr. Nabarro: The borrowing powers were £100 million, and are now to be advanced to £200 million. Therefore, it

is not unreasonable to say that the whole of the original sum voted for borrowing powers is in sight of being expended. The Joint Under-Secretary of State readily agrees with me.
The point I want to make to the right hon. Gentleman is that last year the British Electricity Authority used £85 million for capital development on power stations. For that sum they generated approximately an extra 1,100 megawatts of power. In Scotland, we have a capital commitment, over a period of five years, of approximately £94 million, of which perhaps only £56 million is taken up to date, yet the megawattage of power available is only approximately one quarter of that available from the British Electricity Authority for an expenditure of £85 million. That is an alternative way of stressing my point.

Miss Margaret Herbison: Quite a number of hon. Members are wondering where the hon. Gentleman's argument leads. One of his own supporters has already asked whether the hon. Gentleman was suggesting that because this scheme is so costly we ought not to have electricity in the North of Scotland. If that is not what he means and he is only arguing for argument's sake, there are two points I should like to put to him.
The hon. Gentleman has dealt with the cost of a kilowatt, taking only capital investment into account. That is quite a wrong way of examining the matter. One has to look at what electricity is going to cost in the future. The first point I want to stress is that manpower required in a hydro-electric scheme is very much smaller than in a solid-fuel station. The second point, following the hon. Gentleman's argument, is that we are having the greatest difficulty in getting coal for our own industries, for solid-fuel electricity stations and for export. If the hon. Gentleman's argument means anything, he must go on to tell us where we are to get the solid fuel if we are to wash out all kinds of expenditure on hydro-electric schemes.

Mr. Nabarro: The hon. Lady is suffering from an excess of impetuosity. If she will let me continue and complete my comparative figures she will find that I shall cover each of the points to which she has referred. I merely counsel, because I believe it to be correct to do so.


that the capital development cost of the hydro-electric method of generating power is comparatively six times or more as great as in the case of a power station.
The other argument, an economic one, is the effect upon our coal economy, and the contribution that hydro-electricity schemes can make towards balancing our coal budget. The excessively high capital cost of hydro-electric schemes is justified, in existing circumstances, by the extremely bad coal prospects for the United Kingdom during the next few years. I am not over-emphasising when I say "extremely bad." I point to the fact that in 1951, excluding bunkers, we exported only eight million tons of coal, and we brought into this country 1,220,000 tons of American coal. It therefore follows that our net exports of coal, excluding bunkers, were approximately 6,750,000 tons, which is the lowest figure on record for any year of peace.
If these hydro-electric schemes are capable of providing electric power for just a small part of the United Kingdom—which is undoubtedly so, but it is a very small part—in addition to the needs of the local residents, then there is, on grounds of coal economy alone a case for justifying a six times higher capital expenditure to get the electric power, instead of paying American dollars to import coal. [Interruption.] I am not going back over my tracks, but I am satisfied that the capital cost of development is as high as I have said.

Major D. McCallum: I think my hon. Friend has the emphasis wrong. He said "in addition to supplying electricity" to Ross and Cromarty, for instance. The whole essence of the thing is to supply electricity to Ross and Cromarty, and then, if there is any over, to give it to England.

Mr. Nabarro: I am sorry to cross swords with my hon. and gallant Friend, but in my view that is not the essence of the scheme. If £100 million of the nation's capital resources has to be put into a scheme to provide electricity for something of the order of 1 per cent. of the nation's population, I should say that the whole scheme is perhaps out of balance.
I hope that when he replies the Under-Secretary will give us a comparison of

the cost to a consumer, per unit of electricity derived from the hydro-electric scheme in Scotland—taking such places as Aberdeen, Edinburgh or Glasgow—and the comparable cost to a consumer in England for a unit of power generated by a standard British Electricity Authority power station.
In justifying this extremely high capital cost of hydro-electric development, I should be glad if the Under-Secretary would tell us what benefit the electricity grid south of the Border will derive from hydro-electric generation in the course of the next three or four years. When the schemes were first promoted, one of the principal facets in the arguments of the people who raised the original sums of capital, was the fact that the scheme would be capable of exporting electricity cheaply to the North of England. Only a negligible amount has yet become available.

Sir W. Darling: Is not my hon. Friend the joint author of a book in which appeared the phrase, "Make coal work harder"? Is this not what he is advocating now?

Mr. Nabarro: I have said today that the excessively high cost of capital development of the hydro-electric schemes could only be justified on account of the fact that there is a direct saving in coal. It is primarily for that reason that I am supporting the Bill.

6.55 p.m.

Mr. John MacLeod: I was glad to hear that my hon. Friend the Member for Kidderminster (Mr. Nabarro) was really supporting the Bill. Its main object is to try, first of all, to supply electricity to people in the Highlands who have no electricity at all, and unless we produce it in this way I cannot think that they will get electricity in any other way. I hope that the day will come when we shall export more electricity than the people of the Highlands themselves can use.
I support the Bill, but I agree with my hon. and gallant Friend the Member for Perth and East Perthshire (Colonel Gomme-Duncan) that we must watch the ever-increasing costs. It is imperative that they should be looked into in detail, because I am sure that many savings can still be made.
An important point is the guarantee which is demanded from small crofting communities. When Mr. Tom Johnston got his Act through Parliament he gained the support of Highland hon. Members at that time by guaranteeing that the people in the Highlands would have the first call on the electricity when it was available. However, small communities are now being asked to guarantee large sums. A man told me that the guarantee for a smallholding was £60, which is an enormous amount of money for a small crofter, and that man is living beside another community which got the electricity free to the gable end, as it was guaranteed in the Act. The guarantees ought not to be so high, because the small crofting communities are potentially great consumers of electricity.
The hon. Member for Kidderminster gave the impression that the scheme was just to supply electric light to the people in the Highlands. That is not the full picture. The people in the Highlands have a tremendous amount to contribute, especially if we have small communities making component parts, to be assembled at centres, of articles which are of great value in our re-armament programme. The Hydro-Electric Board would find that the people in the Highlands would consume far more electricity if the guarantees were not so frightening to the small crofters, who are not prepared to pay them. This is an important point, and we ought never to forget that Mr. Tom Johnston got sympathy for his Act by guaranteeing that the people in the remote areas of the Highlands should have first call on the electricity.

7.0 p.m.

Captain J. A. L. Duncan: This is a policy Bill and I do not wish to oppose it. It increases the possibility of borrowing by the North of Scotland Hydro-Electric Board by £100 million. It does not, however, allow the Board to borrow that sum. The Board can only borrow it piece by piece, according to the permission of the Secretary of State for Scotland and the Treasury.
The first point I want to make is that the Board itself should be informed sufficiently early how much it will be allowed to borrow on as long-term a programme

as possible. There are two main expenditures for the Board: the production of electricity, and distribution. My constituency is concerned mainly with distribution, and the local office of the Board does not know even yet, although it is the end of January, how much it is to be allowed to spend this year on distribution.
That is very unfair to the Board. It means evasive answers to inquiries. It means that when people ask for electricity, the area manager can only say, "We will do it if we get the raw materials and if we have permission from the Secretary of State." My plea tonight is that under this new business Government there should be a proper business arrangement between the Government and the Board, so that the Board will know as far ahead as possible not only the amount of borrowing that will be allowed, not only for capital works, but also for distribution.
My second point is this. The Board is a national monopoly, and I think that the average person of independent thought in the Highlands is suspicious of monopolies. The people want to be quite certain that things are being run properly and not too expensively, as my hon. and gallant Friend the Member for Perth and East Perthshire (Colonel Gomme-Duncan) has said. They want to be assured that the scheme is a business proposition, that when they get evasive answers there is good reason for not being able to give electricity to a certain town, and that if their costs are higher than those of their neighbours there is a good reason for it.
I do not think that we have reached perfection in the relationship between monopolies and the public. Certainly, we have not done so in the nationalised monopolies like, for example, coal. But the North of Scotland Hydro-Electric Board is a special case. The hon. Member for Orkney and Shetland (Mr. Grimond) mentioned a similar point. The Government and the Board ought to work out some better scheme of public relations. I can give my experience in a sentence. In the last seven weeks, while we have been away on holiday, I have had no fewer than three local distribution schemes brought to my notice. The persons concerned have asked me to interview the area manager to ascertain what


would happen to the schemes. That should not be necessary for a Member of Parliament. There should be some form of public relations between the public and the Board so that there is proper knowledge and confidence between the Board and the public.
One other aspect occurs to me. There are ample opportunities in the north of Scotland for public relations to be developed on a quite cheap, if not an almost free, basis. There are many clubs—Rotarians. Chambers of Commerce, the Housewives' League, for example—and all sorts of bodies who are only too anxious to get people to talk to them, to give lectures and so on, in the winter months all over the north of Scotland, if only the Board can provide the experts with the knowledge and ability to put over the case. I am quite certain that the relations of this national monopoly in the north of Scotland would be very much better, and Ministers would have very much less trouble in the House, if this was gone into and if the public relations aspect of the hydro-electric industry in the north of Scotland was examined.

7.6 p.m.

Lord Malcolm Douglas-Hamilton: I should like to say a word or two in favour of the Bill. I do not want to cross swords too fiercely with my hon. Friend the Member for Kidderminster (Mr. Nabarro), but I think that his way of looking at problems of the Highlands is exactly one of the reasons why we have not had greater Highland development in the past. It is not merely a question of giving electricity to the now all too few inhabitants of the Highlands. It is a very great thing that at this time of financial stringency we can look ahead to a scheme of hydro-electric development. It is a case of enabling the Highlands to play their full part to help the nation out of its difficulties, and it is no good simply comparing Highland conditions with those in the rest of the country.
The charter of the Hydro-Electric Board has two main charges, which are, at first sight, in conflict with each other. The first is to provide electricity to the remote consumers in the north. The second is that the scheme must be a commercial proposition. Quite obviously, at some stage or another, these things will

come into conflict, and the greater the cost of the scheme, the less the local consumer is likely to benefit.
It is no good pretending that we are doing the good job which the Board set out to do in providing local consumers with electricity, when, in fact, we are not doing so. It is perfectly true, as Mr. Tom Johnston said, that the Board is providing 20,000 new consumers a year, and that is certainly to the credit of the Board. But where are they? I have an enormous number of constituents who continually write to me and who are not being provided, or who are being provided at costs which they are virtually unable to pay.
If the Board, under the present charter, cannot do the job that we want—that is, the development of the Highlands in the right way, so that they make their contribution to the economic benefit of the country—Parliament should consider a new charter. It may be that redistribution of industry and population will become so important that almost any expense is worth while. But I should like to see a little more done now with industry as far as these hydro-electric schemes are concerned, and I wish to leave just one further suggestion.
The Hydro-Electric Board should allot one scheme, at least, wholly to the development of new industry. I should like to see a place in the West Highlands, like for example, Cannich, become an industrial estate and encourage industry to come to the north. The hydro-electric schemes in Scotland will not produce very much power in relation to that produced all over Britain. The output will come only to about 5 to 7 per cent. of the total, and at present, of course, it is nothing like that figure.

Mr. Nabarro: Does my noble Friend realise that at present the whole of the hydro-electric scheme in Scotland represents 1·7 per cent. of the total electric power produced in the United Kingdom?

Lord Malcolm Douglas-Hamilton: My hon. Friend is quite correct. When fully developed, the scheme will represent only something like 7 per cent. But I submit that all of that could be usefully used in the Highlands, and I hope that when it is developed, other development takes place which enables that to be the case.

7.10 p.m.

Mr. Snadden: I think hon. Members will agree that we have had a very interesting debate on this rather complicated and technical subject of hydro-electricity.

Mr. Speaker: I understand the hon. Member has already addressed the House on this Motion. He must ask the leave of the House to address it again.

Mr. Snadden: I beg pardon, Mr. Speaker. I should have asked the leave of the House. Many of the questions addressed to me are of a technical nature and relatively unskilled people could not deal with them effectively on the spot, but I will try to deal with a number of questions which have been put because I believe they are very pertinent and should be answered, if at all possible.
In a way I feel that my hon. Friend the Member for Kidderminster (Mr. Nabarro) has misled the House in this debate. I should like to point out to him that this Bill authorises the Board to borrow. It is not voting the Board money but authorising the Board to borrow further money to carry out their schemes; and the £94 million to which he referred, I am informed, has no relation whatsoever to the kilowatts already in production. It is the estimated cost of the schemes confirmed, many of which are not even yet completed.
I was very puzzled to grasp what it was that my hon. Friend, with all his vast experience of the subject, was asking. If it had been about pigs and cows I could have understood him, but I came to the conclusion that he had been very woolly. The comparison is not between the capital cost of kilowatts but between the costs per unit of output. The cost per unit of hydro-generated power is vastly cheaper than that of steam power, and if it were not so the North of Scotland Hydro-Electric Board would vanish. It is rather dangerous to be misled on this.
I think we should all like to associate ourselves with what was said by the right hon. Member for East Stirling (Mr. Woodburn) about well-known people who have brought this scheme into operation, Lord Cooper, Mr. Tom Johnston and the late Sir Edward MacColl. On behalf of the Government, I associate myself with everything he said about them.
The main question put by the right hon. Gentleman was one which was common to the debate and was running through the speech of almost every hon. Member. It was the fear that because of our economic situation capital investment cuts will be very drastic and will therefore affect the future of hydro-electricity. I will deal with the point raised by my hon. and gallant Friend the Member for Argyll (Major McCallum), which is a slightly different one, a little later.
All I can say on the main question, apart from what the Chancellor said this afternoon—which I would recommend every hon. Member interested to read—is that my right hon. Friend certainly said that fuel and power would come in the first class of priority, but personally I should like to read his actual words before saying more. What I can say for the Secretary of State is that, in allocating investment resources which may be made available in present circumstances, the special needs of the Highlands, particularly this region, are being kept very much in mind. That is some sort of assurance on that matter.
A question was raised about roads made by the Board. I know of one region where, because the Board are working out a very big scheme, they are inevitably knocking the countryside about and affecting the farms. They have run a road right through a glen to carry out their work, but incidentally, it is of very great assistance to the farmers, who would otherwise never have got a road at all. There is much to be said for co-operation between the Hydro-Electric Board and the farming industry.
The right hon. Gentleman mentioned a figure which I do not think was quite accurate and I wish to give him the figure relating to farms connected to the Board's system. At the moment the number connected for the North of Scotland area is just over 5,000, which is one-eighth of the total. The North of Scotland area is by far the largest in the whole of Scotland. It has 41,000 farms and 5,000 are connected. That shows that there is still a great deal to be done.
My hon. and gallant Friend the Member for Perth and East Perthshire (Colonel Gomme-Duncan) spoke about the Tummel-Garry scheme and the cost of the work, suggesting that we should look very carefully at extravagance. In


answer, I can only quote the safeguards against extravagance. As he probably knows, constructional schemes have all to be examined by the Secretary of State and after they are submitted to him they are subjected to very close scrutiny, including Parliamentary scrutiny, which also covers the estimated amounts of the works. My right hon. Friend has also to give a borrowing consent in respect of every scheme of which he approves. It is true that in a period of rising costs, what is estimated today may turn out to be very much more as a scheme progresses. I know that in connection with one large scheme factors such as conditions found when tunnelling or building a great dam were not foreseen by the greatest experts.

Mr. Emrys Hughes: Like the groundnut scheme?

Mr. Snadden: In that case it was dollars which went down a drain but in the other case it was water coming through a tunnel.
The hon. Member for Orkney and Shetland (Mr. Grimond), made a point which I have not heard before about taking oil by sea, which he said should be cheaper. I can only give the assurance that I shall have the suggestion put to the proper quarter. The answer to his question in regard to guarantees appears to be that the Board are giving supplies without a guarantee to pre-1948 consumers; that is, before the nationalisation of electricity. Since then they have had a much wider field to operate in and now, by statute, they are responsible for seeing that they do not make a loss. They must not do that, but they are subsidising uneconomic supplies to the extent of about one-third of the cost.

Mr. Grimond: As I understand it, had their area not been extended then it would not have been necessary to ask for guarantees.

Mr. Snadden: I would say that is so; but I should like to look into the question because it was raised by two other hon. Members and I think it an important one. I should like to look into it, and I should not like to commit myself to a more specific answer beyond what I have said.
The hon. Member for the Western Isles (Mr. M. MacMillan), raised the question of supplies to remote areas, as did some

other hon. Members. Here we are up against a very complicated business. Because many people do not happen to live near the lines of construction, they have to pay very much higher charges, naturally, because the capital costs are very much greater. I refer the hon. Member to the Report of the Board which, on page 16, goes very fully into the difficulties of serving these remote areas. I can tell him that the Electricity Consultative Council for the North of Scotland district have been examining this difficult question in consultation with the farming interests and I assume they will have some proposals to bring forward. I have not seen their proposals, but I know that they are going into this difficult question of how to get an economic supply to the remote areas.

Mr. M. MacMillan: Perhaps the point has not been quite completely grasped. I am not thinking of, nor was I speaking of the individual who is a little off the main road or far from the lines of supply. I was thinking of whole areas, villages, islands, which have been completely neglected in spite of the undertaking—or was it merely what should have been a reliable forecast?—that by 1949 90 per cent. of the population in the Islands would be served. I think of North Uist or Barra, with roughly the same topography and the same distribution of population as South Uist, and where there is very much the same element of cost involved. Why should there be a delay of four or five years in the case of these whole communities?

Mr. Snadden: I follow the hon. Member's point. I had taken it up rather differently.
There is the further point that where agricultural holdings are in areas where supplies are expensive, they should realise that there is provision for assistance under certain Acts of Parliament, such as the Hill Farming Act. In addition, just as coal can be charged against revenue so can electricity supplies. I do not think that that is well enough known.
The hon. Member for Tradeston (Mr. Rankin) asked about the future of electricity policy and whether I could make, any statement with regard to the future of the Hydro-Electric Board's powers. I cannot say any more than was said by


the Secretary of State in reply to a Question which the hon. Member put. He said:
I do not contemplate that any change in the present organisation of the electricity industry in Scotland would impair the special responsibilities for the Highlands and Islands placed on the North of Scotland Hydro-Electric Board by the Hydro-Electric Development (Scotland) Act, 1943."—[OFFICIAL REPORT, 4th December, 1951; Vol. 494, c. 2209.]
It is clear that their special powers will not be impaired by any change that might be made.
My hon. and gallant Friend the Member for Argyll (Major McCallum) raised a point which I found rather difficult to follow. I think that what he was trying to bring to my notice was the fact that the restriction of credit is affecting existing agricultural legislation—the Hill Farming Act and the Livestock Rearing Act—and he asked, why cut credit to people who are financing these schemes and stop them from going on when we can come forward with this Bill to take powers for the borrowing of further money? All I can say to him is that I am well aware, from the agricultural point of view, about this danger of restricting credit to such an extent that full advantage is not being taken of productive enterprises sponsored by Government legislation. This point has been brought to the notice of the Chancellor of the Exchequer by the responsible Ministers, and I hope that it will be looked at by his Department.
I have covered all the points which I have noted. If there are any others with which I have not dealt, they will appear in HANSARD, and I shall see that they are looked into and sent to the proper quarters. I hope that the House will now be able to give this Bill a Second Reading.

Question put, and agreed to.

Bill accordingly read a Second time.

Committed to a Standing Committee.

HYDRO-ELECTRIC DEVELOPMENT (SCOTLAND) [MONEY]

Considered in Committee of the Whole House under Standing Order No. 84 (Money Committees).—[King's Recommendation signified.]

[Colonel ALAN GOMME-DUNCAN in the Chair]

Resolved,
That, for the purposes of any Act of the present Session to extend the borrowing powers of the North of Scotland Hydro-Electric Board, it is expedient to authorise—

(a) the payment out of the Consolidated Fund of any increase attributable to the said Act in the sums which may be required by the Treasury for fulfilling any guarantees given by them under section fourteen of the Hydro-Electric Development (Scotland) Act, 1943, in respect of loans raised or to be raised by the said Board, so, however, that the aggregate of the amounts outstanding in respect of the principal of any stock issued for the purpose of raising any such loan (other than stock issued to the British Electricity Authority in respect of compensation paid by that Authority under the Electricity Act, 1947) and of any moneys temporarily borrowed by the said Board do not at any time exceed the sum of two hundred Million pounds, excluding stock issued and moneys temporarily borrowed for the purpose of redeeming stock or repaying moneys temporarily borrowed; and
(b) the payment into the Exchequer of any sums paid in or towards the repayment of any sum issued out of the Consolidated Fund by virtue of the said Act of the present Session.—[Mr. Snadden.]

Resolution to be reported Tomorrow.

METROPOLITAN POLICE (BORROWING POWERS) BILL

Order for Second Reading read.

7.25 p.m.

The Secretary of State for the Home Department (Sir David Maxwell Fyfe): I beg to move, "That the Bill be now read a Second time."
The purpose of this Bill is to empower the Receiver of the Metropolitan Police District to borrow additional sums not exceeding £5 million to meet the needs of police building in the Metropolitan Police area. Parliament has from time to time been asked to give authority for the raising of loans for this purpose. The most recent authority is in the Metropolitan Police (Borrowing Powers) Act, 1935, which authorised borrowing up to £4 million. Of this amount £2 million was


taken up before the war, £500,000 has been borrowed since 1945, authority has just been given to borrow a further £500,000, and the remaining £1 million is expected to be exhausted before the end of the financial year 1952–53.
Therefore, Parliament is being asked for authority for further loans now so that there may be no check in the progress of building operations and particularly in the provision of houses for married policemen and their families and of single men's quarters. As I have indicated, first and foremost comes housing. The Metropolitan Police aim is to provide housing for 4,000 police families. Before the war 1,200 houses and flats were available. Since the war a further 1,600 have been provided or are under construction. Of the balance of 1,200, tenders have been invited or received for 300, and the programme will be completed as rapidly as possible.
The present programme contemplates additional quarters for 2,000 single men and women. It is unnecessary for me to devote much time to stressing the urgent need to provide reasonable accommodation for policemen and their wives, particularly in an area where accommodation is more than usually scarce and there is such a serious deficiency in the strength of the police force. Everyone in the House will agree that, in the nature of things, a force such as the Metropolitan Police is often at a serious disadvantage in the matter of housing.
Appeals have been made on various occasions for London housing authorities to recognise the special disabilities of the police in this respect when those authorities are allocating their houses but, while some have helped, the general response has been disappointing. There is, in addition, a need for some building work on police stations as distinct from houses but, of course, the rate at which that programme can be fulfilled must in the present conditions be highly problematical, and this is recognised in the amount specified in the Bill.
If I state briefly the relation of the problem I am putting before the House to the general question of expenditure, not only by the central Government but by the local authorities, I hope that the House will forgive me because I think it

ought to be put into perspective. The total building programme which we have in mind covering all classes of building would extend, at a reasonable estimate, to a capital cost of £17½ million. Although it would be foolish at the moment to attempt to set any term to the completion of this programme, I hope it is not outrageously unrealistic to say it will be completed in 12 years.
In accordance with the accepted practice, the cost of the programme will be met partly by loan and partly out of current revenue. It is, I am told, the general view of the authorities in London that the amount spent from rate revenue in building operations for the Metropolitan Police should not exceed the result of a 1d. rate. At present a 1d. rate would produce about £400,000 and, with the Exchequer grant, we have £800,000 available from income, if I may put it that way, for building purposes. On the assumption of a 12-year period, that leaves something like £8 million to be raised by loan.
I think the House will agree it is sound practice that one should not ask for the whole amount at one bite, if I may use that word, because it is preferable to come back and ask again so that the House can keep control over the borrowing for this purpose. That is why we have asked for only £5 million at the present time.
The only other aspect which I think the House should know about is the ultimate cost. I am assuming that the loan will be based on a repayment period of 30 years, because this is the normal period for loans by the Receiver. I also assume that the loan will carry interest at the current rate of 3¾ per cent. On this basis the charge by way of interest and sinking fund when the whole £5 million is taken up will be some £280,000 a year. But against that the provision of the living accommodation of which I have spoken will result in a saving in rent allowances of an estimated amount of £100,000 a year. So we are left with a net figure of £180,000 a year. Of that £90,000 will fall on the central Government revenue and £90,000 on the rates.
That is the ultimate figure which, of course, we shall not reach for a long time. In the next year the charge will be negligible. There will be no additional


cost in the current financial year, and the increased cost in 1952–53 will be negligible. As I have explained, the sums we have available for borrowing will enable a gradual increase up to the sum of £90,000 in respect of rates. I do not think, therefore, that anyone can consider that that is an excessive amount.
Although this is a small and somewhat technical Bill I wish the House to appreciate and to be with me on the need of the police for houses. It is a very important subject and I am anxious that we should continually improve the recruiting figures and bring the force up to strength. I am anxious that the men who are recruited should have those decent conditions which are particularly important for men who are working the hours which police have to work.

Mr. Barnett Janner: Would the right hon. and learned Gentleman tell the House whether any provision is being made for housing the widows of police officers? He knows the problem which confronts such widows. Frequently they may have to move from the married quarters, and perhaps he has considered the possibility of allowing them to remain after their husbands have died, or perhaps been killed.

Sir D. Maxwell Fyfe: If the hon. Member would allow me to look into that problem I will communicate with him. Frankly, it is not one with which I have acquainted myself and I would rather make no answer except one which would be helpful to the hon. Gentleman and to the House.

7.35 p.m.

Mr. Geoffrey de Freitas: My hon. Friends may have points on finance or housing which they may wish to raise, but I would assure the right hon. and learned Gentleman and the House that we do not oppose this Bill in any way. We welcome, as we did when in office, any action designed to improve the position of policemen. We welcome this Bill as we did the steps taken by my right hon. Friend the Member for South Shields (Mr. Ede). We will always welcome anything which would assist in building up the strength of the police wherever it may be, and especially in the Metropolis.
Throughout the country the police forces are below establishment. The most

recent figures which I have for London, which are for November, show that the Metropolis is down 4,000 on an establishment of about 20,000, which is serious. Of the general difficulties throughout the country housing, obviously, is the most important. Policemen are not the most welcome of lodgers, because of their hours of work and the fact that they need such things as drying facilities.
London is much worse than the provinces. I speak with knowledge of one city, the City of Lincoln, which is a typical city of its size, where they have no real problem as they are only eight down in an establishment of 120. The difficulties of housing in London are made greater by the fact, as we can all judge when we pass the time of day with the policemen who serve this House so well, that the police officers come from the far corners of these islands. They come from the provinces and face this real problem of housing.
We hope that as a result of this Bill we shall not only reduce the amount spent in rent allowances but, in the long run, increase the housing accommodation for single and married men. The House knows that the position of the police has improved greatly in recent years and the police force today provides a real career for men. There is no need for men to stand back. They should come forward to join this fine service. Today, we might well amend the words of W. S. Gilbert and say:
… taking one consideration with another, A policeman's lot is now a happy one.

7.39 p.m.

Mr. Ian Harvey: The hon. Member for Lincoln (Mr. de Freitas) has voiced the views of hon. Members on both sides of the House about the principle of this Bill and I am certain that my right hon. and learned Friend will find complete support for it.
I wish to raise with him a point of which I have given him previous notice. It is purely a technical point. He referred to the period of 30 years as being the normal period of a loan. I think, however, that I am right in saying that the normal period for borrowing for housing is 60 years. If we adopt that longer period the loan charge is, in fact, reduced from £280,000 a year to £210,000.
Allowing for the mathematical calculations which my right hon. and learned Friend has described to us, it would mean that the annual rate burden would be reduced from the £90,000 to which he referred, to £55,000. It would seem to me, in the absence of any argument which the right hon. and learned Gentleman might put against it, that this would be a more healthy period, and I do hope that he may see his way to adjust this in his Bill.

7.41 p.m.

Mr. G. A. Pargiter: There are a few points upon which I should like to ask one or two questions of the Home Secretary. First of all, I should like to know exactly what type of housing accommodation is envisaged. In my view, in the past the provision of houses for the Metropolitan Police has been based on entirely wrong conceptions. What we have created in the past have been barracks—"section houses" is the name they are known by—and it really means that there are policemen above, below and on either side of one another.
I believe, from a purely community point of view, that that is bad development. I think a policeman's house ought to be in the middle of an ordinary community of people—that policemen should take part in the life of the community in the ordinary way, with Mrs. Brown, the policeman's wife, talking to Mrs. Jones, the bricklayer's wife, instead of to Mrs. Jones, another policeman's wife. There is obviously all sorts of back chat which goes on as a result of that type of development.
Secondly, I should like to know that, whatever is provided in the way of housing as a result of this loan, it will in no way affect the provision of housing materials and supplies to the local authorities in Greater London or Metropolitan Police areas. I think it is very important that there should be no question of it being regarded as something which is to be fitted into the ordinary housing programme. I think it might be wise to add this total number of houses or flats to those to be provided by the local authorities and to ask the local authorities to provide that additional number of houses with the consent, of course, of the Minister of Housing and Local Government. If that were done it

might well be that we could get an additional number of houses, which would also be much better distributed among the community than would be possible as a result of that type of development.
I have always held that the development of one section of the community—police or otherwise—all together in one particular environment is not a good type of development. There is, perhaps, a rather critical aspect about this. It is interesting to note that the provision of houses for this purpose is to cost more than rent allowances. Rent allowances practically equate to what police officers have to pay for housing accommodation and, although I am not necessarily objecting to it, from the ratepayers' point of view it is not a very good bargain if, to save rent allowances which are reasonably adequate, they are to pay another £90,000 per year, over and above what they are now paying. I am wondering whether it is not an expensive piece of work to save rent allowances which, after all, have some relationship to the economic rent being paid today by police officers. I think we should look at that question.
I would ask the Home Secretary to consider the possibility of a conference with local authorities in the Metropolitan Police area with a view to providing a dispersed form of housing for police officers in addition to the total number of houses they would be providing in the ordinary way, thereby allowing the police officer who is given this advantage to fit into the ordinary scheme of things. It would be an innovation, but I think that when we are to spend £5 million on police officers we are entitled to some innovations. If that were done it seems to me that it would be better. It would be getting away from the idea of herding all police officers in one community, and it would also ensure the development of houses in areas where policemen are, much more than getting them together in specific blocks.
I do not know how far it would be possible for the right hon. and learned Gentleman to go in that direction, but if we are to pay for this purpose more than we are now paying in the way of rent allowances it seems to me that we should do it in the best possible way. I am not really satisfied that it is not better to pay the rent allowances for the officers


concerned. It might have been argued—I think it was argued—that housing accommodation, as far as the Metropolitan Police Area is concerned, has had some effects on recruiting. I believe the position in the Metropolitan Police Area is that they do not want very many recruits at the moment.
As a result of the alteration in pay and allowances, the position of the policemen has improved very considerably in the Metropolitan Area. I may stand to be corrected on that, but I think it is a point that we might well look at. I have always argued that normal housing is rather better than special provision, always provided it meets the needs of the community and also the special needs of the police force which is necessary in a reasonable area for the purposes of its operations.
I hope that the Home Secretary may be able to make some observations about this. I do not want to imply that I should be opposed to the Bill because of that—because I feel that any addition we can make to the general sum total of houses in the Metropolitan Area is a good thing; but I want to be quite sure that this will make an addition to the total and it will be usefully employed.

7.46 p.m.

Lieut. - Colonel Marcus Lipton: It is, of course, quite true that the provision of more housing accommodation for the Metropolitan Police will not in itself entirely solve the problem of recruitment. It will, naturally, make some contribution towards inducing more men to join the police force, but I think the Home Secretary will agree that other factors and other considerations enter into the minds of the man or woman who desires to become a member of this force.
Another point made in the course of the discussion of this Bill is the undesirability, from a planning point of view, of herding together large numbers of police constables in large blocks of flats. It so happens that in my own constituency there are several large blocks of flats, specifically provided by either the City of London Police or the Metropolitan Police for their own police constables. The feeling I have about these aggregations is this: it does tend to isolate the policeman and his wife and family from the general life of the community in which they live.
I know that the difficulties in London are perhaps greater than elsewhere in providing a dispersed form of housing accommodation in separate houses scattered over the various boroughs of the Metropolis; but I hope that those concerned in the provision of police accommodation will not concentrate on exclusively the provision of large blocks of flats in which the members of the police force will live the somewhat cloistered lives that living together like that seems to entail.
Nowadays there is very much less suspicion than there used to be between the police force on the one hand and members of the general community on the other, but I think that anything which tends to break down whatever barrier may still possibly exist is worth exploring. For that reason I would like to support the suggestion, that, so far as possible, the police in the Metropolitan area should not be housed in blocks of flats.
There is one other point perhaps of greater constitutional importance which is involved in the Bill. This House has few opportunities of discussing the finances of the Metropolitan Police Force which is in an entirely different category from any other police force in the country. It is different because the control of the Metropolitan Police is vested by statute in the Commissioner of Police subject to the approval of the Home Secretary. That places the Metropolitan Police and all its activities, and, in particular, the financial concerns of the Metropolitan Police, in an entirely different category.
In the county areas outside London we have standing joint committees of democratically elected representatives. These committees precept on the county council which, in turn, precepts upon the constituent local authorities. In the county boroughs we have the watch committees which are committees of the local borough councils and which control the police forces in the county boroughs concerned. In London that situation does not apply. This has caused a certain amount of heartburning on the part of the 28 metropolitan boroughs and the fairly considerable number of other local authorities which come within the Metropolitan Police area.
The reason for this uneasy frame of mind on the part of the local authorities


in the Metropolitan area is simply explained by the fact that out of the rate which he pays every ratepayer in the Metropolitan area pays 1s. 8½d. in the pound for the Metropolitan Police. In that way some £8 million is provided by ratepayers for the maintenance of the Metropolitan Police. For example, the Lambeth Borough Council contributes £183,000 a year towards the maintenance of the Metropolitan Police without having a single right to express its view as to the manner in which this money is spent or in respect of the calculations upon which these figures are based.
What happens is that every year, on 14th February, St. Valentine's Day, the Metropolitan Police send a circular to all the local authorities with whom they are concerned informing them that for the forthcoming year the police rate will be a certain amount. Last year the police rate was fixed at 1s. 8½d. Neither the local authorities nor this House have any knowledge whatever of the estimates on which that precept is based, because it is not until some time after the Commissioner of Police asks the local authorities to pay this precept that this House is presented with the Estimates on which the precept is based.
I find that for some years past the demand has gone out from the Metropolitan Police to the local authorities on 14th February and no Member of this House has had an opportunity of seeing the Civil Estimates, which include the Police Estimate, until 9th March. That seems to be a negation of the principle of no taxation without representation. It persuades me to say that the Metropolitan Police are subject to less democratic control than any other police force in the length and breadth of the land.
The local authorities in the Metropolitan area have no say whatever in the financial and other operations which may be involved in the provision of police protection. I know that this matter has been brought to the notice of more than one Home Secretary and that whenever it is brought to the notice of any Home Secretary, including my right hon. Friend the Member for South Shields (Mr. Ede), the answer is that it is impracticable to consult all the 100 or so rating authorities in the area.
But in my opinion it is still possible to arrange some form of consultation with a limited number of perhaps five or six appointed people to represent all the rating authorities in the London area. They could consult the Commissioner of Police or the Home Office on the Estimates before the precept was issued. Surely it is right that both Members of Parliament and local authorities should have an opportunity to see the Estimates on which the precept is based before the precept is issued and that they should be allowed, as Members of Parliament or through local authorities, to make such representations as may be appropriate.
Having left that point, I proceed to another matter of a financial character in relation to the fairly substantial cash balances which are held by the Commissioner of Police. In the Estimates for the past year the interest earned on these cash balances alone was shown as £10,000. If the Home Secretary refers to the figures for previous years, he will find that in the six years since 1945 the total amount of interest earned by the Receiver, who is the financial officer of the Metropolitan Police, is no less than £76,000. That is a considerable sum.
In effect, the average interest earned over the past six years or so has been between £12,000 and £13,000 per annum. That is a factor which should not be overlooked in considering the demands made upon the people of London for the maintenance of the police force. This Bill will impose a further additional charge upon the ratepayers in the Metropolitan area. Fortunately, the fact that this legislation has had to be presented in the form of a Bill has provided the House with an opportunity of commenting upon the financial implications which may be involved.
A further point I wish to make is that the local authorities and the ratepayers in the London area are, to some extent which it is not possible for me to calculate, subsidising the Government in the discharge of their financial responsibilities to the Metropolitan Force. At present the situation briefly is that half the cost of the police force is provided by Government grant. The other half is provided by precept on the lines that I have described. That is, briefly and roughly, the position.
Included in the estimates of the Metropolitan Police Force is a figure of £100,000 for the discharge of what are described as "imperial and national" services. This figure was fixed in 1909, 43 years ago, because the Police Act of 1909 provided that:
… there shall be paid in each year out of moneys provided by Parliament in respect of services rendered by the metropolitan police for imperial and national purposes such sum as the Secretary of State, with the approval of the Treasury, may determine.
This figure of £100,000, which has remained unchanged since 1909, provides the Metropolitan Police Force with the extra money for the additional expenditure entailed by visits of foreign royalties and dignitaries from abroad, and the ceremonial functions in connection therewith.
The cost of the Metropolitan Police has gone up tenfold since 1913–14. In the latter year, the Metropolitan Police cost somewhere about £2,500,000; in the current year, it is costing £25 million. Although the cost of the police has multiplied 10 times, we are asked to believe that the cost of discharging their national or imperial responsibilities is the same as it was in 1909. That I find difficult to believe. It means, in effect, that the ratepayers of London are subsidising the cost of this particular part of the duties of the Metropolitan Police, because those duties must inevitably entail a larger expenditure now than they did when the sum of £100,000 was originally fixed as a result of the 1909 Police Act.
I do not expect that the Home Secretary is in a position to deal with these rather important matters that I have ventured to raise tonight. I hope, however, that in the not too distant future he and his advisers will consider the problems that I have presented, so that the ratepayers of London or the Metropolitan area, and the local authorities concerned, may have removed from them a sense of grievance which they have, not unjustifiably, felt for some considerable time.

8.3 p.m.

Mr. Ede: I want to limit my remarks to one point raised by my hon. Friend the Member for Southall (Mr. Pargiter) and another point raised by my hon. and gallant Friend the Member for Brixton (Lieut.-Colonel Lipton).
I share the view expressed by my hon. Friend the Member for Southall, who said that it would be a good thing if policemen did not live in section houses or in barracks. During the six and a quarter years when I was Home Secretary, I made many efforts to persuade local housing authorities of the Metropolitan Police district to let me have an assurance that, on their various housing estates, an odd house here and there would be provided for a police officer, but the response which I received was surprisingly disappointing. I was told that it was my job to provide housing accommodation for the police.
I still retain the view that a scattered police force is a great deal better in the police system of our country, where, after all, the policeman is only an ordinary citizen discharging duties that any one of us may be called upon to discharge in keeping the King's peace. I think that it is also a good thing for the discipline of the force, and for good feeling between policemen's wives.
If we have a dozen or more policemen living together, and one of them unfortunately becomes involved in some disciplinary offence and gets a stoppage of pay, or some other indication of the displeasure of his superiors, when his wife goes out and sees two of the wives of other policemen talking together, she assumes that they are talking about her husband. That is not a good thing. If the men are living in reasonable isolation—I mean one in one part of a housing estate and another in another part—that kind of thing does not arise. After all, it is a good thing, in the police system of our country, that the police should be living the lives of ordinary citizens, mixing when off duty with their neighbours, who have something else to think about than the idiosyncracies of the local superintendent.
Therefore, I would make an appeal to the housing authorities of the Metropolitan Police district to assist the Commissioner of Police in making available houses which can be used for police purposes. Of course, it is essential—and I know that this is one of the difficulties—that the Commissioner should be assured that, if the man whom he places in such a house is moved, for promotion or other reasons, the house shall be available for the man who is taking his place.
It is desirable that the police force should be reasonably distributed, and therefore I welcome the Bill. In fact, had the General Election ended more satisfactorily, I and not the right hon. and learned Gentleman would have been proposing the Second Reading of this Bill. It was because I knew what would be said that I was not in the House when the Home Secretary made his speech, and I apologise to him for it. Hearing another man arguing one's brief is not a way of spending a pleasant evening.
I hope that nothing I have said, however, will be a hindrance to the right hon. and learned Gentleman in his relations with the housing authorities or the Commissioner of Police in continuing what I believe, in the main, is sound policy. Let us have no misunderstanding about it. In a great city like London, it will always be necessary to have some section houses mainly for unmarried men who would be available to deal with the kind of emergency that a great city presents to a police force.
Now I want to comment on the speech of the hon. and gallant Member for Brixton. The people of the Metropolitan Police district have no grievance over the method of financing the Metropolitan Police Force separate from that which is felt in every county area in the country. I speak as one who served for 35 years as a member of a county council, half of whose area is in the Metropolitan Police district, while the other half is outside. I served as chairman of that county council for four years. Annually, the standing joint committee presented its precept to us, and, if any member of the county council had dared to utter a word on that precept, it would have been my duty to explain to him that a standing joint committee is not merely above criticism, but is also beneath praise, and that one may say nothing about it at all. There are obvious reasons why the House, in 1888, adopted that principle with regard to the standing joint committee.

Lieut.-Colonel Lipton: Will my right hon. Friend permit me to put a question to him? Were there not, on the standing joint committee with which he was acquainted, representatives of the members of the county council, of which he was the chairman?

Mr. Ede: Oh, yes; half of them were there, but even they could not say anything about this matter at the county council meeting. My hon. and gallant Friend is a Member of this House, and it is for him, as he has done this evening, to raise matters connected with the Metropolitan Police when that business comes before the House.
I do not complain that the Opposition, during the six years in which I was at the Home Office, never put down the Home Office Estimates for debate, or that no discussion of the matter took place. I do not imagine that the right hon. and learned Gentleman opposite will come along to us and say, "Why do you not have a jolly good row about the Metropolitan Police?" I have no doubt he will be as much for a quiet life as all his predecessors in office. Let this be quite clear, that the Estimates are submitted to this House; and if the Opposition have any grievance with regard to the way the Metropolitan Police are conducted in financial or other matters, it is open to them, on the appropriate sub-head of the Estimates, to call for a discussion to take place here. This is the place where the Metropolitan Police Force can be discussed, and if there is any feeling with regard to the other kinds of matters to which my hon. and gallant Friend alluded, this is the place where they should be discussed.
I did on more than one occasion meet representatives of the boroughs and urban districts—the rating authorities—in the Metropolitan Police district, and I have no doubt that the right hon. and learned Gentleman, if he were asked to meet them, would also agree to meet them. But let it be understood that the duty of the police authority for the Metropolis is vested in the Commissioner, and the Home Secretary has to answer in this House for what the Metropolitan Police Force does. In that respect the ratepayers and electors of the Metropolitan Police district are better off than the ratepayers and electors of county areas, for the exact limit of the Home Secretary's duties in respect of provincial forces has been very strictly defined, and many things that the right hon. and learned Gentleman has to answer for in this House in respect of the Metropolitan Police Force he does not have to answer for in this House in respect of the provincial police forces.
Let me just say this in conclusion. I believe that the Metropolis gets very good


value for money out of the expenditure that is incurred on the Metropolitan Police Force. I was rather surprised to hear from my hon. Friend the Member for Southall that recruiting for the Metropolitan Police Force had been so good that it was no longer a cause of anxiety. I cannot think that the additional attraction to serve under the right hon. and learned Gentleman rather than under me has had so sudden an effect on recruiting. I hope that if he holds office as long as I did—not that I am going to help him to do it—the recruiting will improve.
I am quite certain that, in spite of what some chief constables in the country are now saying, the appropriate housing of the police forces is among the things that could be a very considerable inducement to the right type of recruit. I hope this Bill will have a Second Reading, and that, in spite of some things that we hear about the difficulties in building, there will be a substantial improvement in the housing of the Metropolitan Police Force as a result of the passing of this Measure.

8.14 p.m.

Sir D. Maxwell Fyfe: I ask the leave of the House to speak again for a very short time. First of all, let me thank the hon. Member for Lincoln (Mr. de Freitas), who opened the debate, and the right hon. Gentleman the Member for South Shields (Mr. Ede), who closed it, and almost every intervening speaker, for the good wishes they have expressed for the solution of the general problems of the police, and specifically of their housing problem.
My hon. Friend the Member for Harrow, East (Mr. I. Harvey), raised a point of which, as he said, he had been kind enough to give me notice, about the period being 30 years. Well, it is a traditional period, but there are other arguments. I do not want to go into them in detail, but I want my hon. Friend to know that his point has been considered. I think that, if he does look into the matter again, he will see that there is a difference between borrowing for the purposes of police houses and borrowing for the purposes of local government housing, where, of course, a direct impact on the rents has got to be considered.
From the point of view of the Metropolitan Police we are bound to take into account the fact that the total sum

involved on a 30-year basis is nearly £1 million less than the total sum involved on a 60-year basis on a loan of £1 million. I think the right hon. Gentleman will agree with me—I hope he will—that anyone who has to consider the problems of the Metropolitan Police has to consider the problem of pensions not only today but in future years. That is a point that has to be taken into account.
If there were real hardship in the matter I should be pleased to consider it again, but the difference, as the hon. Gentleman points out, is £35,000 a year, and the larger figure for which I am contending in this argument is rather less than the product of a farthing rate; my hon. Friend's figure is slightly more than the rate of on eighth of one penny. We are really dealing with a very small sum which, I think, is outweighed by the considerations which I have endeavoured, very shortly, to put.
The hon. Member for Southall (Mr. Pargiter) made a point, which has been reinforced by the right hon. Gentleman, about the type of housing. I have looked at the figures since he spoke and I find that there has been, broadly, a 50–50 division between houses and flats; and—I will check it in view of what the hon. and gallant Gentleman the Member for Brixton (Lieut.-Colonel Lipton) said—that the majority of these blocks of flats are small blocks. But I want the hon. Gentleman to realise that I am in general sympathy with the view, which he put forward first and the right hon. Gentleman supported, as to dispersal and, as a matter of principle, the police living among other people.
But, in turn, I should like to have his support, with his great local authority experience, in responding, and in getting his colleagues and friends to respond, to the request which I make, just like the right hon. Gentleman, that the local authorities should be more forthcoming than they have been in the past in contributing to the solution of this problem.

Mr. Pargiter: Has the approach been made or would it be made on the basis that this additional demand on whatever their housing allocation may be is something extra for which they will not be required to provide money, but for which the money will be provided out of the fund now being created?

Sir D. Maxwell Fyfe: We will look into every argument, and I am sure that the hon. Gentleman will approach it in a spirit of goodwill and anxiety to help. He will see that, in view of the facts which the hon. Member for Lincoln put forward as to the difficulties of recruits to the Metropolitan Police who come, as we all know, from different parts of these islands, there is a very special difficulty which demands, I think, a solution; and we have tried to propound one.
I do not think that continuing rent allowances is a satisfactory way of dealing with the problem, instead of dealing with it as a 30 years' problem as we are trying to do. I emphasise the importance of the type of house; and also the ability to get a house for the successor to the original occupier doing the same job. I am sure the hon. Gentleman will consider all these points when weighing up the argument he has propounded, and which I will, of course, consider with the care it deserves.
Most of the points made by the hon. and gallant Member for Brixton have been dealt with by the right hon. Member for South Shields—certainly the main point. I cannot think of any police authority that is so sensitive to public opinion and any well-grounded complaint as the Home Secretary, as the police authority for the Metropolitan area. After all, there are all the Members of this House who can criticise and raise matters in innumerable ways. I think the history of the House shows how readily any problem of real substance is raised, and how often Home Secretaries with powerful majorities behind them have bowed to that expression of opinion. The more detailed points which the hon. and gallant Member propounded are, as he said, not points to be answered on the spur of the moment. They are matters for inquiry, and that inquiry I shall make.
Once again I apologise to the House for taking up its time. My only explanation and excuse is that this interesting little debate—little in time but not in subject-matter—has shown that the needs of the police are not forgotten in this House; and I hope that will go out to the police. It is in that spirit that

the House is giving a Second Reading to this Bill.

Question put, and agreed to.

Bill accordingly read a Second time.

Committed to a Standing Committee.

METROPOLITAN POLICE (BORROWING POWERS) [MONEY]

Considered in Committee of the Whole House under Standing Order No. 84 (Money Committees).—[King's Recommendation signified.]

[Mr. HOPKIN MORRIS in the Chair.]

Resolved,
That, for the purposes of any Act of the present Session to confer a further borrowing power on the Receiver for the Metropolitan Police District, it is expedient to authorise the payment out of moneys provided by Parliament of any increase attributable to the said Act in the sums which, under section three of the Miscellaneous Financial Provisions Act, 1950, are payable out of such moneys.—[Sir D. Maxwell Fyfe.]

Resolution to be reported Tomorrow.

ELECTRICITY SUPPLY (METERS) BILL

Order for Second Reading read.

8.25 p.m.

The Parliamentary Secretary to the Ministry of Fuel and Power (Mr. L. W. Joynson-Hicks): I beg to move, "That the Bill be now read a Second time."
This is a modest Bill, and I hope and believe that it will prove to be as uncontroversial as it is brief. It follows in cause, to some extent, what my right hon. Friend the Chancellor was saying this afternoon. It is an economy measure, and is designed to limit the immediate expenditure of capital investment. Its immediate object is to postpone the date by which electricity meters which are not at the present time certified will require to be certified. If I may, I will in a few moments explain to the House the brief history of this matter.
The story begins with the Electric Lighting (Clauses) Act, 1899, Section 49 of which provided that the value of the supply of electricity to ordinary consumers was to be ascertained by a certified meter. The years passed and very few certified meters were provided. That, I think, is not really surprising, because


certified meters had to be provided by being certified by people who rejoiced in the name of "electric inspectors." Electric inspectors were created by the local authorities, but in point of fact local authorities created scarcely any at all, so it was not surprising that comparatively few meters became certified.
All went perfectly well under that system until one day a particularly bright consumer declined to pay his electricity bill because he had not received his supply through a certified meter. That precipitated a crisis; the matter had to go before the court, and the court found that the consumer was perfectly justified. Something had to be done about it, and in consequence Parliament passed the Electricity Supply (Meters) Act, 1936, which provided, amongst a few other things, for the legalisation of the use of the then existing meters which were installed even if they were uncertified; it made them legal until either they were disconnected and other meters were installed instead, or 1st July, 1948, whichever date should be the earlier.
From that time certification proceeded normally and all new meters installed were certified meters. However, the war postponed further certification, and during the war the procedure lapsed entirely. By the end of the war it was quite clear that it would be impossible by 1948 to catch up the back-log of certification which was necessary, and so the Government which was then in power—through, I think, the predecessor of the hon. Member for Bolsover (Mr. Neal), who is now on the Opposition Front Bench—introduced Section 52 into the Electricity Act, 1947, which postponed the date by which meters were required to be certified for a period of five years, until 30th June, 1953.
The object of the Bill which is now before the House is still further to postpone that date until 30th June, 1958. The reason is that the present situation is that there are, roughly speaking, 15½ million electric meters in this country. Out of this number there are some four million which are uncertified. If all these four million meters had to be replaced or certified by 30th June, 1953, it would necessitate special arrangements being made for the manufacture of meters, and it would involve a capital cost of some £3½ million. We do not consider that is

a necessary and essential investment to make at the present time.
It would also forfeit a direct economy which will arise as a result of postponement of the date of certification until 1958, because there is a substantial amount of current which is now consumed which passes through meters on a direct supply. If by 1953 we had to certify the meters, we should have to instal certified meters for measuring the direct current which is received by these particular consumers. That supply should be changed by 1958 and will become alternating current, so that if we did before 1953 instal certified meters to measure direct current, we should have to take them out and instal fresh certified meters for measuring the fresh type of current which is being installed. That would cost an additional £390,000, and it really does not seem to be worth while.
There is one other thing which perhaps I should say, because I think that the House would wish to know whether or not the postponement of certifying these meters is going to have an adverse effect upon the consumers. Is it going to mean that the consumers are to be charged more for the electricity they take because the meter through which it is valued is an old-fashioned one or a bad one? I think that I can give the House an assurance upon that point.
The meters which at the present time are being certified—the meters which are being taken out from the consumers' supply at the present time—do show on test that very often they are perfectly accurate within the margin of error which is allowed by the regulations, but where they do err—where they are outside the margin of error—it is far more usual for the meter to have run slow with age and consequently to charge the consumer for less electricity than he has actually received. Therefore, it is unlikely that the consumers will have any objection whatever to this proposal that for five years some of them will have to continue with their existing meters.
On the other hand, if they themselves should have reason to believe that their meters are running fast and they are being charged excessively for their electricity, they have a statutory right to require that the meters should be examined, and if they are examined by


an official examiner and found to be running fast, so that the consumers are being charged more than they should, then they have the right of recovery against the electricity board.
That is the effect of this brief Bill. I conclude by quoting the words of very nearly half the speech of the late Mr. Bryce who moved the 1899 Bill from which this springs. When he moved it, he said:
I think this is a Bill which the House will agree in considering a very useful Measure, and one which is, therefore, likely to be a considerable convenience.
That was one-half of his speech, and the other half explained the Bill. I am afraid that I have taken up rather a lot of the time of the House, but I adopt the words of the hon. Gentleman who spoke on a previous occasion.

8.35 p.m.

Mr. Harold Neal: In welcoming this Bill on behalf of the Opposition, I should like to take the opportunity of congratulating the Parliamentary Secretary upon what I believe is his first speech from the Front Bench, and also to compliment him on the precise and explicit manner in which he has moved the Second Reading of the Bill.
There are some things Governments do whether they choose or not. Time and circumstances overtake them, and they find themselves taking action in matters which they have neither designed nor contemplated. Consequently, we find the Parliamentary machine often grinding out legislation of an obscure character with which the average citizen is often unfamiliar. Onlookers on the Parliamentary scene would hardly believe possible what is now being enacted, because this is one of those rare occasions upon which the Opposition is in complete agreement with the Government. I hope right hon. and hon. Members opposite will not take this as a precedent likely to be followed during the rest of this Session.
The original Act of 1899 defined that electricity should be supplied through certified meters. It was an Act which, to say the least of it, was not very closely observed. The 1936 Act attempted to repair this oversight with equally disappointing results. A further attempt was made in the Electricity Act of 1947

and a date was fixed upon which all meters should be certified. Again, however, the target has not and is not likely to be reached. Neither the men nor the materials are available to certify the remaining number of meters within the specified period. Indeed, I doubt whether it would be wise at this vital stage of our economic life to divert the essential materials and labour to the completion of this job.
During the brief, bright and glorious hour of life that I spent at the Ministry of Fuel and Power I went out of my way to canvass the opinions of electrical engineers in at least four or five areas covered by the electricity boards in the country. They were all unanimous in believing that there should be a postponement of the appointed day. I agree with the Parliamentary Secretary that the electricity consumer should feel no perturbation about postponement, because it is generally known that uncertified meters run slowly, which means that they operate to the advantage of the consumer. I welcome this Bill again on behalf of the Opposition. I wish it a quick and easy passage.

8.38 p.m.

Sir Herbert Williams: I should like to add a few brief words, because this is the grandson of my Bill. The 1936 Act was a Private Bill, and its history is rather interesting. There was an electricity consumer in East Ham, which had a Socialist controlled local authority, who received a bill for about ten times as much for the corresponding quarter of the previous year. He declined to pay, and the East Ham Corporation cut off his electric power. He happened to have had a legal training, and he proceeded to study all the Electricity Acts. He found out that for some reason an electricity inspector had never been appointed, except in the Metropolitan area, and that East Ham was outside the Metropolitan area.
This all happened during the General Election of 1935. I was away engaging in the Election, but when I got back to my office I heard this story. The Electricity Commissioners were in a jam, as were the power companies and one or two municipal organisations. I said that the only thing to do was to validate all existing meters and provide, by Act of Parliament, that they had all got to be checked within a certain time.
I had no difficulty in squaring the Labour Whips at the time, because it was a Socialist council which was in a jam. Other domestic consumers in the country were refusing to pay their bills, because there was no basis on which to compile a bill. In passing, this only applied to domestic consumers. Power customers were charged in a different way. The obvious thing was to pass a Bill to put the matter right.
I sat down and drafted a one-Clause Bill which would solve all the problems. The officials got really busy then, and although it was my Bill it was taken over and re-drafted by the Electricity Commissioners. Hon. Members will be aware that, in the end, every Bill is drafted by a lawyer. Not a word goes into a Parliamentary Act but some lawyer benefits. Unfortunately, Hitler came along and the job was not finished. If it had been finished then there would be no need for the present Bill. As I was the author of the original Act, the only Electricity Act to be promoted by a Private Member, I thought it appropriate that I should say these few words.

Question put, and agreed to.

Bill accordingly read a Second time.

Committed to a Standing Committee.

INDUSTRIAL AND PROVIDENT SOCIETIES (NO. 1) BILL

Order for Second Reading read.

8.42 p.m.

The Financial Secretary to the Treasury (Mr. John Boyd-Carpenter): I beg to move, "That the Bill be now read a Second time."
The Bill sets out to do three things: to raise from £200 to £500 the limit of the individual shareholding in an industrial or provident society; to raise from £20 to £50 the limit on the size of deposit which may be made with such a society; and to raise from 10s. to £2 the limit on the size of the deposit which may be made at any one time.
I should make it clear what bodies would be affected by these changes. The Bill applies to approximately all the 6,000 societies registered under the Industrial and Provident Societies Acts. They include, in addition to retail and wholesale co-operative societies—the type of body to which one colloquially applies

the description "co-op"—some 3,000 clubs, including a great many British Legion clubs, some 500 housing societies, something in excess of 500 agricultural co-operatives which supply farmers with materials and market their produce and in some cases actually themselves farm, and some 500 smallholding and allotment societies. The Bill therefore increases in some degree the rights of a considerable number of societies of very varied types.
The theoretical justification for these changes is the fall in the value of money since the limits were originally fixed. The size of the shareholding was fixed at £200 as long ago as 1862. I have had a calculation made, which in the nature of things must be approximate, from which I understand that, in terms of the £ of 1862, the £ of today represents 6s. 5d. Therefore, looked at even from the point of view of abstract theory alone, there is considerable justification for altering financial limits fixed when the value of money was very different from what it now is.
But there are also two good practical reasons why it is thought desirable now to make this change. In the first place, the taking up of shares in these societies is an admirable method of saving, and a very considerable volume of small savings is so effected. I understand that in the case of at any rate a number of societies, savings which could otherwise be effected are being lost because the people who would wish to allow, for example, interest accruing on their holdings to accumulate, are not able to do so because their holdings are already up to the limit and it is therefore, necessary for the societies, in compliance with the law, to notify these people that they must remove the money now accruing to them. In view of the great need to assist national savings, a need which has certainly not been diminished in the minds of any of us by the statement of my right hon. Friend earlier today, it seems that we should be very wise to give greater facilities for saving in this direction.
There is also the special case of the agricultural co-operatives. In many cases they are in need of capital to finance the purchase of the very expensive machinery required by modern agriculture. I understand that in a number of cases some difficulty is being encountered for this reason.
As regards the deposits, which are dealt with in Clause 2, substantially the same considerations apply. The real justification is the change in the value of money. Any hon. Member of a mathematical turn of mind can work it out that we have not been able to effect an exact proportionate increase. What we have sought to do is to insert in the Bill round figures which bear a certain relationship to the change in the value of money and are, I understand, acceptable to the organisations themselves, and, although it would be perfectly possible to say that in one case it should be slightly more and in another case that it should be slightly less, it seems to us necessary from a commonsense point of view to round the figures to those which we have effected, £50 and £2.
There are only two other matters which I shall mention. As the House will observe from Clause 3, the Bill does not apply to Northern Ireland. That exclusion has been inserted at the request of the Government of Northern Ireland, and the matter is essentially one for the Northern Ireland Government and Legislature to consider.
I ought also to mention that if the House is good enough to give the Bill a Second Reading, it is the intention of the Government to introduce in Committee an Amendment largely of a procedural nature. Many of the societies have rules which limit the amounts of shareholding or deposit to the amounts fixed by the existing law. It will be necessary for them in due course to amend those rules, but we shall seek by an Amendment to the Bill to authorise them to increase shareholdings and deposits up to the new legal limit in advance of the necessary amendment to their rules. As the House will be aware, amendments to the rules of these societies require to be approved by the Registrar, and it might well be that some pressure on the Registrar's office, and some delay, would result if the changes could not be made until the societies had effected the alteration in their rules.
That is the essence of the Bill. Perhaps I might add that it is brought forward at a not inappropriate time, for it is almost exactly 100 years since the Statute 15 & 16 Victoria c. 31, an Act "to legalise the formation of industrial and

provident societies," which was the legal definition of the movement, became law. Therefore it is, perhaps, appropriate that we should try to bring these fixed limits more into accord with the modern value of money and that we should do it in the centenary year of the societies' organisation to which it relates.

8.50 p.m.

Mr. Douglas Jay: I am glad to be able to say that we can, in this case also, promote a spirit of national harmony this evening by giving whole-hearted support to the Bill.
This is another instance where the Government have so sensibly adopted the policy of their predecessors. I assure the Financial Secretary that the best way for him and the Chancellor of the Exchequer, and, indeed, the rest of the Government, to continue this non-party atmosphere, which they often tell us is so desirable, would be for them in other matters, great and small, thus to adopt the policy of the previous Government. Indeed, I can undertake that in so far as they do this, their efforts will be received in that spirit of national unity which the Prime Minister so eloquently preaches when he is in power and so energetically destroys when he is in opposition.
As the Financial Secretary says, the Bill enables societies registered under the Industrial and Provident Societies Act, in substance, to raise the shareholding limit from £200 to £500, with certain other consequential changes. My information is the same as his, in that the limit of £200 reaches back to the year 1862. I fully agree that there have been large changes in the value of money since then. We need not argue tonight who is responsible for those changes, because when one goes back as far as 1862 all the political parties, including even the Liberals, would be pretty heavily involved.
On a strict comparison of money values, one could, perhaps, justify a rise to a higher figure, probably, than £500. Five hundred pounds today would, surely, be a smaller proportion of the total money in national income than £200 was in 1862. It would be, I would also have thought, an even smaller percentage relatively of working-class savings.
The Financial Secretary said that the change will be equally welcomed—this is my information also—by the agricultural


and the ordinary type of co-operative societies—as he called them, the "ordinary co-ops," both of which always seem to me to play a larger and, perhaps, more meritorious part in our general economic life than we sometimes remember in the general economic debates in the House. It always seems to me that these societies combine many of the merits and avoid many of the defects both of some forms of private enterprise and of some other forms of public enterprise.
I also have the same information as the hon. Gentleman about the possible effect of the Bill upon savings. Members of these societies tend to leave their dividend to accumulate up to the figure of £200, but when that figure is reached the societies, as they have to do under the present law, notify them of the fact and from that moment onwards the members, it appears, tend to spend the dividend rather than to leave it to accumulate further. If that is so, and it seems to be agreed that it is, we are by the Bill making a real contribution to that increase in national savings by the small saver, which we all wish to encourage, with the possible exception of the noble Lord the Member for Dorset, South (Viscount Hinchingbrooke), who is not here to disturb the harmony of this evening.
I am not saying that the Bill is so perfect as to be beyond any improvement in Committee, and I gather that the hon. Gentleman already has one Amendment in mind. Some of my hon. Friends who have expert knowledge and experience of the working of these societies may possibly also have one or two Amendments to put down. I therefore express the hope that the Government will receive such Amendments in the same sympathetic spirit in which we are receiving the principle of the Bill this evening.

8.55 p.m.

Mr. F. Beswick: I wish to say a word of welcome to the Bill and to the proposed Amendment which the Financial Secretary has promised. I think we all agree that for the theoretical reasons put forward by the Financial Secretary we should restore to the societies the facilities they enjoyed under the original Act of 1893.
It is also worth while spending a few moments on the reasons why we should encourage these societies. It is often

claimed by hon. Members opposite that industrial, productive, or constructive activity can only be stimulated if there is profit-seeking capital, but here in the societies registered under this Act there is evidence to the contrary; and the evidence is indeed impressive. The Financial Secretary gave some figures, but he did not give the figures of the trading involved. I think I am right in saying that the retail and wholesale societies affiliated to the co-operative union alone now do a business which amounts to more than £1,000 million a year—a very impressive figure. The agricultural societies must be doing a turnover of around £90 million a year.
Some explanation of this quite remarkable growth can undoubtedly be found in the loyalty of the members to the society, to the idea of the society and indeed to the ideal of the society, but it is also a fact that to the members concerned this is a more efficient way of supplying themselves with the goods and services they require. One reason why it is a more efficient way, in my judgment, is precisely because of the method adopted to finance their activities—the method provided for in this Bill.
There is no question here of any expectation of additional returns to capital. The incentive, initiative and stimulus comes from a desire for a more efficient and economical service, either to the producer or to the consumer. This incentive does work—the figures prove it works—and in my judgment it works more fairly as between the citizen as a producer and the citizen as a consumer, or the citizen as a shareholder.
I wish to give a little illustration of what I mean by working more fairly. If, in 1862, a person invested £200 over a period of years he would get a reasonable return, but that shareholding today would still be worth £200. But, if that same £200 had been invested in another form of enterprise, invested, say, at the inception of a certain insurance company which launched out about the same year, 1862, then that £200 worth of shares would today have a market value for the investor of no less a sum than £1,360,000. No one can argue that any person who advances capital to stimulate enterprise is entitled to a reward of that magnitude.
No doubt the overwhelming majority of shareholders would never have even


seen the factories and establishments into which their capital went. Moreover, in addition to the increase of capital value each year they have been receiving a very substantial sum by way of interest. In one case, therefore, we have these societies where the rewards of initiative and enterprise come to citizens as consumers or producers, but in the other case the reward goes overwhelmingly to the person who provides the money, to the shareholder or money lender.
In the orthodox type of company or organisation which Members opposite tend to support the rewards go to people who, in my judgment, are not entitled to the amount of reward that they are now drawing. It is, of course, essential that money should be ploughed back into an enterprise, whether in the case of a society registered under the Act or any other type of society. But I deny the right of the shareholder to claim all the money ploughed back as his exclusive property. The producer, the consumer, and, in some cases, the State itself ought to have a prior claim to some of the money put back into many productive enterprises.
I remember particularly the case of some farmers in the Middle West of America who banded themselves together, or co-operated together, to provide themselves with animal feedingstuffs and fertilisers, and across one of their mills which they had built they had inscribed, "Farmers have paid for many mills: this one they really own." I think that, similarly, there are many enterprises in this country which have been built up by the energy, initiative and abstinence of the men, managers and consumers which are now completely owned by people who certainly contributed the original money, but have not since whispered a word or moved a muscle to encourage the development of that concern.
I welcome the Bill. The principle of financing enterprise which is embodied in it is one that we ought to look at again and see if we cannot, as my right hon. Friend the Member for Battersea, North (Mr. Jay) said, utilise it in other ways. We ought to see if we cannot finance more and more activity in this country along something of the same lines as those societies of which we have

been speaking this evening. I welcome the Bill and I hope that, with Amendments, it speedily reaches the Statute Book.

9.2 p.m.

Mr. W. Coldrick: I should like to extend a hearty welcome to the Bill. If all the legislation which His Majesty's Government introduce is as beneficial to the whole community as is this Measure, I can assure them that they will have a great deal of support from these Benches. I apologise to the Financial Secretary for my inability to be in the House when he made his speech. I have no doubt that he has already drawn attention to the fact that, owing to the change in values, this arrangement for an increase in the capital holding of each individual member has been rendered more than necessary.
I wish only to indicate that a great deal of his need has arisen particularly since the war. I have had experience of the trading and consumers' side of the movement, particularly during the period of the war. During the whole of that period, when young men were in the Forces and wives were working, it was common experience for a large number of them to allow their savings to accumulate inside the co-operative society, which played an effective part in connection with the savings movement.
Most of the people connected with the savings movement will readily agree that the Co-operative movement of this country has never received full credit for the part it played in increasing the savings which went into the war effort during that period. We were conscious that in allowing their dividends, as they are generally termed, to accumulate inside the Co-operative movement, those people were doing so in response to our exhortations, in the hope of being able, at the end of the war, when they settled down and built their new homes, to buy the consumer goods which were not available during the war.
Therefore, there was a considerable capital increase during the whole period of hostilities. Since the war there has, of course, been a considerable amount of dis-saving. The result has been that these young people and others have bought a


large quantity of consumer goods. That, of course, has tended to increase the difficulties of the Co-operative movement and presumably all the other organisations, working within the provisions of the old Industrial and Provident Societies Act.
I wish to indicate, so far as my own experience within the Bristol area is concerned, that this has been rendered imperative because during the whole period of the war we baked bread in Bristol not merely for members, but I should think we supplied half of the Forces stationed in the South-West with bread from the Bristol bakery. That meant that the plant was running for 24 hours a day and the result was an inordinate amount of depreciation. Since the war it has been impossible to replace that plant at anything like the price we paid for it. So far as we were limited by this proviso that no member should contribute more than £200, it has been increasingly difficult in that direction.
What applies to bakery plants also applies to much of the other plant, and I think it appropriate that I should remind hon. Members, and particularly hon. Members opposite who very often like to castigate the Co-operative movement, that during the whole period of the war we had in Bristol what I regard as a model dairy and we were able to place milk on the doorsteps of houses in adjacent towns immediately after the blitzes. That I consider is evidence of the fine work which can be accomplished by people who really believe in co-operation rather than competition.
All this, of course, has meant that plant has depreciated so much more rapidly and has caused us to extend the works and to purchase new plant. In consequence we feel more keenly these restrictions which are imposed upon us. Everyone appreciates that the amount of capital which must be involved in stock is infinitely higher today than either at the time when the original Act was passed or during the time up to the war.
If £200 constituted a reasonable limit in pre-war days, I submit that £500 represents an appropriate sum at this moment. We discovered that 25 per cent. of this capital is held by people who have already reached the maximum figure and consequently, unless this particular restriction is removed, it impedes the possibility of people saving, which is so

desirable a thing in the interests of the country. It is unwise for us to exhort everyone else to save, in order that the country may enjoy the advantage of that saving, and then, through legislation, to make it increasingly difficult for them to do so.
For those reasons, I am pleased to accord a welcome to this Measure on behalf of the Co-operative movement. I understand that a Government Amendment has been suggested, which we would welcome if it would make it possible to operate this provision without the necessity of going to the Registrar or proceeding in the tortuous way which one has been obliged to proceed in the past to avoid it proving a fairly costly matter. I think the Government can rest assured that we shall do everything possible to assist the passage of this Measure and to help to improve it.

9.10 p.m.

Mr. G. R. Mitchison: For the same reasons as those of the hon. Member for Bristol, North-East (Mr. Coldrick), who has just resumed his seat, I welcome this Bill. There are a number of co-operative societies in my constituency and it has occurred to me that there is one point which has perhaps been overlooked or postponed, and I rise to ask the Financial Secretary to give it his consideration, if possible by an Amendment in this Measure: if not, in some other form.
A great deal of practical inconvenience was caused before the Local Government Act of 1948 by the disqualification of members of co-operative societies from voting in municipal matters where the local co-operative society had some interest, and it was the main purpose of Section 131 of the Local Government Act of 1948 to remove the disqualification of indirect interest by way of shareholding not exceeding £200. It is true that in the Section in question there is no express mention of a co-operative society, but it was said at the time—and indeed it was quite obvious—that the £200 had some connection with the fact that the maximum limit for co-operative shareholding at that time was £200.
If this Measure goes through—and I hope it will—the result will be that shareholders who have a holding of less than £200 in a co-operative society and who


happen to be on a local council will not thereby be disqualified from voting on matters in which the co-operative society has an interest; but there will arise an intermediate class of shareholder holding between £200 and £500 worth of shares in the co-operative society. Unless some Amendment is made they will have an indirect interest, which, in their case, will prevent them from voting on matters on which that co-operative society has an interest.
I am quite sure that no one could possibly defend the existence of that state of affairs, and I merely rise to suggest that if the permissible shareholding is to be raised from £200 to £500, an Amendment ought also to be made in what is, in fact, Section 131 (2) of the Local Government Act, 1948, and the sum of £200 mentioned in that Section ought to be increased to £500. I do not wish to suggest in detail how it should be done, but it does appear to me that, as there are already a number of Amendments of various statutes in Section 1 of this Bill, it might be possible to make the necessary Amendment in the Committee stage.

9.15 p.m.

Mr. John Rankin: First, I must apologise to the Financial Secretary to the Treasury because, unfortunately, I was not able to be in the Chamber to hear his opening speech and he may have covered one of the points with which I want to deal. I want to assure the House, lest there should have crept in the feeling that this is an English Bill, supported only by English societies and by the English Federation, that the Scottish societies and the Scottish Co-operative Wholesale Society very strongly support the Bill. The Government can rest assured on that point.

Sir William Darling: Does the hon. Member declare an interest?

Mr. Rankin: Yes, the interest that a good citizen always has in good deeds. I welcome this good deed by the Government.
The first point I want to make on the Bill is that in Scotland we welcome it because within the Co-operative move-

ment savings are largely an involuntary process. As a rule, the member of a society leaves his dividend in the society until the £200 limit has been attained. Once that limit has been reached, the tendency throughout the societies is for the members to withdraw the dividend. They feel that they have done their good deed, and so they withdraw their dividends with the result that that money acts as a sort of pressure on the price of available commodities. It does not stimulate savings to the extent that we want to see them stimulated today.
By raising the total amount which can be held in share capital to a maximum of £500 we provide every possibility that the member, having attained the £200 mark, will allow his savings to remain in the society until the £500 maximum has been achieved. While I recognise that, to some extent there is merely a postponement of the process already noted, nevertheless it should have a good effect during a period of what we hope will be temporary economic embarrassment. Therefore, I welcome the Bill on behalf of Scottish societies from that point of view.
There is a second point which I wish to make. It is possible that the Financial Secretary may have covered it already. To take advantage of the Bill when it becomes an Act, which we hope will be soon, societies will require to incorporate an amendment in their rules. I believe that there is a suggestion which the hon. Gentleman may have accepted that this should be done merely by resolution to be incorporated into the rules of the society when they find that convenient.

Mr. Boyd-Carpenter: I did foreshadow an Amendment in the Committee stage which, I hope and believe, will take care of that point.

Mr. Rankin: I am very glad to hear that and, with my thanks, I reiterate Scottish support for the Bill which, I hope, will have a speedy passage in becoming an Act.

Sir W. Darling: Is not the effect of this Bill to supply co-operative societies with more than double their present capital without application to the Capital Issues Committee?

Mr. Rankin: It certainly will increase the amount of capital which may be


employed by the societies and by the federation, but we must remember that this power was granted way back in 1862. Anyone who measures the value of a maximum shareholding of £200 in 1862 will readily agree that £500 in 1952 is not in any way disproportionate. I think I may say, without betraying any secret, that after what we have heard this afternoon there will be no great freedom given to societies to enable them to expend their new accumulations.

Question put, and agreed to.

Bill accordingly read a Second time.

Committed to a Standing Committee.

TUBERCULOSIS, SCOTLAND

Motion made, and Question proposed, "That this House do now adjourn."—[Mr. Redmayne.]

9.21 p.m.

Mr. Malcolm MacPherson: I wish to draw the attention of the House to the question of tuberculosis in Scotland. It is pleasant to find that we have a little more elbow room for this discussion than normally falls to the lot of a speaker on the Motion for the Adjournment, and I hope that Scottish energies have not been exhausted by the debate earlier this evening on another Scottish topic.
The question of tuberculosis in Scotland, as I think the Joint Under-Secretary of State will agree, has been a somewhat melodramatic question of the course of the last few years. Some surprising things, and some still unexplained things, have happened, and the whole matter has been attended by not only a good deal of publicity but, I think one might also say, notoriety. In the post-war years, there has been a very considerable increase in the incidence of tuberculosis in Scotland from causes which, as far as I know, are still not understood, at a time when, in other countries, the incidence of tuberculosis was falling. In the last 2½ years or thereabouts, there has been a sharp decline in notifications, in deaths, and in the whole incidence of tuberculosis in Scotland. I am not sure whether the reasons behind that fact are fully or even partly understood either.
The right hon. and gallant Member for Kelvingrove (Lieut.-Colonel Elliot), on one occasion, described this rather

curious episode—the rise in incidence; he was not then talking about the fall—as "a detective story, half read." The experts in the matter could not understand what were the causes producing these results, and, of course, the detective in that detective story must be the expert—the doctor. The general public cannot find out the villain; the detective must be the expert.
With that situation in the background, I think it is desirable that the Government, on this early occasion after taking office, should explain to us what their policy is. I do not think that, since the report on the subject in December, 1950, published some months later, by the Scottish National Health Service Committee, there has been anything like a detailed Government statement. Although there are some illnesses and some pathological states which perhaps can be cured by the simple intervention of the doctor with the patient, in the case of tuberculosis it is abundantly clear to all of us that Government policy lies at the base of any real advance. The major factors in the situation are factors which Government decisions will strongly affect, and will, perhaps, one might also say, either put there or take away, so that Government policy is something which, it seems to me, should be continually made clear.
I should like to ask the hon. and gallant Gentleman whether it is the intention of the Government to maintain in operation all those factors, policies and methods which may have contributed to the decline in the incidence of tuberculosis over the last 2½ years. There used to be a maxim in the Army that you should reinforce success. It is not to meet failure that one throws in reinforcements, but when one is getting ahead; and I would suggest to the hon. and gallant Gentleman that Government policy just now should be based on the proposition that we should take the opportunity of reinforcing the present good trend.
I want to draw attention to one or two specific matters in the very wide range of matters concerned with the prevention of increased incidence of tuberculosis. First of all, in connection with prevention, which, presumably, is the first step in general measures for protecting society against the heavy incidence of tuberculosis, I hope that the resistance of the Scottish community can be built up


—is being built up and is growing up—and that the rise in incidence in the years immediately after the war does not mean that there is any permanent decrease in resistance to tubercular infection.
There is one specific method that has been used to extend our protection against infection, and that is, of course, the use of B.C.G. In the past two years that has been used in connection with nurses, with medical students, and with contacts with people who have had tuberculosis. The question is now a reasonable one: Should the use of B.C.G. not be extended? We were, after all, extremely conservative in introducing B.C.G. as late as we did, after other countries had had long experience of its use.
If there is a case—and that is a technical question on which a layman cannot express a very emphatic opinion—from the medical point of view, for extension of the use of B.C.G.—for example, to children in leaving classes at school, or even more widely than that—does the hon. and gallant Gentleman contemplate that that extension will take place? There is one other question about the B.C.G. programme, and that is in connection with local schemes. Is the hon. and gallant Gentleman satisfied with the extent and effectiveness of the local schemes for B.C.G. just now?
In connection with B.C.G. I think it is possible to turn back to the detective story. One cannot, of course, as I suggested earlier, make a very certain detection, but in the movement of decline from the high and alarming peak of about 1948 both the death rate and the notification rate declined at what, to the layman, seemed to be roughly about the same time. Presumably, from the point of view again of the ordinary, uninstructed layman, if there were one single cause operating there would have been a fairly considerable time lag between any decline in the death rate and a decline in the notification rate; and one is inclined to wonder if there are not two separate causes operating and whether one of them—the decline in the notifications—may not be due to the extended use so far of B.C.G.
I do not know whether the hon. and gallant Gentleman's medical advisers have been able to give him any information

concerned with that question, but it seems to me a relevant question to ask. In that case, one might, I think, ask whether the decline in the death rate has not been due—or has been possibly due—at least in some part, to the use of mass radiography—to pass on now from prevention to diagnosis. To the layman, in recent years the most interesting development in diagnosis has been the use of mass radiography, which enables diagnosis to take place much earlier in the course of the disease. With early diagnosis, treatment can be more effective, and one wonders whether the decline in the death-rate is due particularly to the increased use of mass radiography.
The amount of mass radiography undertaken so far has been fairly considerable. The last statement of the numbers undergoing mass radiography in Scotland shows a rate of 150,000 a year—a fairly considerable proportion of the Scottish population. I do not know that that could not be increased, but when we remember that it applies largely to adults rather than children, and that already about a quarter of a million have been examined, it will be appreciated that a considerable amount has been achieved in mass radiography.
Even so, it is relevant to ask whether its use could not be extended. I believe that there is a certain psychological barrier to extending it to 100 per cent. examination; people do not like to be discovered having any signs of T.B., and one can understand that sort of fear. One can understand also that in this kind of problem the psychology of the approach is in some ways as useful as ordinary medical treatment.
In treatment the big problem has, of course, been the provision of staffed beds in sanatoria, or in other institutions in substitution for sanatoria. The big difficulty has been in recruiting nurses to nurse tuberculosis patients. In recent years there has been a fairly steady increase in the number of staffed beds and in the nursing staff, both full-time and part-time, and I should like to learn from the Under-Secretary whether that trend still continues, whether we are still getting more and more beds brought into use and still getting more and more nurses. Even if the progression is comparatively slight, it is better to have a progression than a decline.
I should like to know, also, what is the situation respecting the nurses' health. Again, there has been a psychological barrier here in the fear that nurses nursing tubercular patients might themselves contract T.B. I understand that that fear is without foundation, but I am wondering whether the hon. and gallant Gentleman and his advisers find that that fear is now being dissipated. I ask specifically also about part-time nurses and how successful that scheme has been, and whether there is any real possibility of increasing the numbers engaged part-time very sizably.
The Swiss project is a fair indication of the spirited and determined way in which the last Government tackled this problem, and I hope that the present Government will continue with it, although we should like the home situation to be so improved that the Swiss project could be dropped, since the reason for it was the lack of nursing staff—of staffed beds really—at home. If it were possible to provide all our own treatment here without the necessity of having treatment abroad we would have advanced very considerably.
I should like to ask the hon. and gallant Gentleman about treatment in the home. It is not so long ago since a well-known public health authority—I cannot remember which it was at the moment—described home treatment as "an idea born of despair"; but in the last couple of years or so, it seems to me, the authorities have been inclined to take a rather different view of it, and that, I understand, is very largely due to the use of new drugs which have proved, so far as one can understand, very effective with certain types of tubercular patients.
If that is so, and if home treatment is now not a treatment of despair but a treatment that can be considered reasonable, then one is inclined to ask the hon. and gallant Gentleman what developments in it are planned. Is it intended that home treatment shall become a really big part of the treatment of tuberculosis, and, in that case, what organisation is planned in order to develop it? The organisation will, presumably, be local, and one imagines that if there was any further considerable development there would need to be a certain amount of local re-organisation or additional organisation.
A further topic in connection with treatment generally is that of after-care and rehabilitation. This is a particular phase of treatment of tuberculosis which does not, it seems to me, get very much publicity; if, in fact, there is very much activity to publicise. One is always aware, in dealing with a subject of this sort, that underneath the ideas that one can grasp as an ordinary layman there are the technical and medical activities which one may not know about, and of which one may not perhaps be able to assess the importance.
I would certainly put it to the hon. and gallant Gentleman that if there is very, much rehabilitation and after-care work done in Scotland, then it has not come very prominently to the notice of the Scottish public; and yet it does seem to be a fairly important element in preventing cases that are already cured from slipping back into a renewed attack of the disease.
May I draw his attention to one or two general questions, not concerned specifically with treatment, on which he might perhaps be able to give the House some information? It is always useful for the figures in a matter of this sort to be kept up to date. It is not always convenient perhaps to give long lists of figures in debates; it does not altogether enhance the liveliness of debate; but if the hon. Gentleman feels that he can bring many of the key figures up to date to the end of 1951, I think that the House would welcome it, because we have a little more elbow room in the matter of time than we might normally have expected.
I should like to ask him about a recommendation in the report of December, 1950, in connection with inquiries into research. Most of them are a little outside my range. I can understand one of them, which was an inquiry into environmental factors. I can understand what that means from ordinary ability to read English, but I am not too sure that I can understand the implications of all the others; but I should like to ask him whether that particular section of the report is to be carried into effect, or is, in fact, being put into effect, under the auspices of the Government?
Finally, it did not seem to me from what the Chancellor of the Exchequer said earlier today that there was any threat in his remarks of a curtailment of


expenditure on the treatment of tuberculosis. I hope that the opposite may be the case and that since the incidence of the disease is now moving downwards that will be taken, as I suggested earlier, as a sign to the Government that this is the time to put more and more resources into it, in order that success may be reinforced. I hope that the hon. and gallant Gentleman will be able to reassure the House that he intends to carry on a progressive and, in that way, a reinforcing policy in this matter over the next few years.

9.40 p.m.

The Joint Under-Secretary of State for Scotland (Commander T. D. Galbraith): I should like first of all to thank the hon. Member for Stirling and Falkirk Burghs (Mr. M. MacPherson) for his courtesy in giving me notice that he intended to raise this subject, and also of the particular points which were causing him a certain amount of concern. It is perfectly true, as the hon. Member said, that the course which the disease followed in Scotland, particularly during the post-war years, differed from that in other parts of the United Kingdom, and I personally have been unable to find any very satisfactory explanation of that, but I am glad to assure the House that the improvement which began some two or three years ago continues, and that the death rate continues to decline.
The hon. Member asked me to give him certain figures in the course of my reply, and I am afraid it may be that I shall give too many figures. I shall try, however, to be moderate in their use. The variations in the death rate from 1938 to the present day have been rather extraordinary. In 1938 deaths per 100,000 of the population amounted to 52, and that figure increased during the war years until we reached a peak in the years 1948 and 1947. The record of deaths then amounted to 66 per 100,000 of the population. The figure started to fall after that and it fell to 60 in 1949 and 47 in 1950. I regret that the figures for the full year 1951 are not yet available, but the figures for the first nine months can be compared with a similar period in the previous year.
In the first nine months of 1951, the deaths recorded were equivalent to an annual rate of 37 per 100,000, compared with 47 for the previous year. So what

has happened in the last three years is that the death rate has fallen—if we can accept 37 for the first nine months of 1951 to be the likely figure for the full year—from 66 to 37 in the period of three years per 100,000 of the population.
Notifications are also showing a steady decline, and that in spite of improved means for detecting the disease in the early stages being used much more widely in recent years. That, in fact, in part accounts for the increase in the notifications between 1938 and 1949, which so startled everyone interested in this matter. The year 1949 was the peak year for notification, when 8,653 were recorded as against 4,793 in 1938. Since 1949 the number has decreased by about 800, and the provisional figure for 1951 is 7,875. These are somewhat impressive and re-assuring figures, but on the other hand they give us no cause whatsoever for complacency. They are the outcome of a continuous and continuing struggle in the scientific research field and also in the preventive and curative fields.
In the research field work is proceeding throughout the whole of the United Kingdom, under the auspices of the Medical Research Council, on scientific and medical problems underlying the treatment of prevention of tuberculosis. In Scotland there is the report of the Tuberculosis Committee of the Scottish Health Service Council. That report has been considered by the Advisory Committee on Medical Research in Scotland. A field survey under Professor Charles Cameron is being arranged. It is intended that that survey shall cover the environmental factors alluded to by the hon. Gentleman, including size and structure of the family, analysis of income, dietary conditions, and the effect of re-housing.
I turn to the preventive side. The most notable method recently introduced has been B.C.G. vaccination. That vaccine has been made available in cases where there was a chance of special risk being incurred, such as in the case of nurses and medical students, and others who are known to have been exposed to infection. While presumptive evidence of the value of that vaccine is provided by experience gained in other countries, and particularly in Scandinavia, its value has not been scientifically established, and tests


towards that end are presently in progress.
The hon. Gentleman asked me about the policy of the Department in connection with the extension of the use of this vaccine. In the meantime, the policy is that there shall be no general extension of these vaccination arrangements. B.C.G. vaccination is a supplementary provision and is not in any way an alternative to the existing preventive methods of local health authorities. It might interest the House to know how many people have recently been vaccinated. During 1950, 23,735 persons were tested with a view to vaccination and 4,500 of them were successfully vaccinated. That is continuing on an increasing scale.

Mr. MacPherson: Before the hon. and gallant Gentleman leaves the subject of B.C.G. vaccination, can he tell us what reason the Government have for not extending it?

Commander Galbraith: Yes, Sir. The hon. Gentleman will have noted that I said that the value of this vaccine has not yet been satisfactorily scientifically established. We would rather wait, before continuing with an extension, to ascertain exactly what the true scientific value may be.
The hon. Gentleman spoke of the need for early diagnosis. That is of the utmost importance, as treatment in the early stages greatly increases the hope of complete cure. Mass radiography plays a very important part in this respect. The history of this service is interesting. The House will remember that it started in Scotland in 1944 with two static units in Edinburgh and Glasgow. Since then, four mobile units have been added. Another two are shortly to be in operation, one in the western region and one in the north and north-east of Scotland. Still another two are in contemplation, one probably to be centred on Dundee and another on Paisley.
Figures of the numbers of persons examined in 1951 are not yet available, but we can offer a comparison of figures for the first six months of 1950 and the same period of 1951, to show how very greatly the work of those units has been expanded. In the first six months of 1950, 78,060 persons were examined: in the same period of 1951 the number was

114,287. Further expansion of this service depends upon the availability of additional skilled medical staff, which is not too easily obtained at the present time. There is one further figure relating to mass-radiography which may be of interest to the House, and that is the percentage figure of active tuberculosis discovered in the course of these examinations. The figure for 1950 was 6 per cent. of those examined and the figure for 1951 was 4 per cent.
I have dealt briefly with the matter of prevention and detection, and I want to say a few words about the curative side, in answer to the hon. Member. Cure naturally depends on treatment, which, in general, can only be given in hospitals or sanatoria. Therefore, the number of beds that can be made available is a matter of great importance, and this in turn naturally depends on the number of nurses which can be obtained. In the last three years great advances have been made in both directions.
An additional 1,173 beds have been provided, which brings the total tuberculosis beds at 31st December last to 5,967, and all but 286 of these beds are now fully staffed. The increase in the staffed beds is reflected in the waiting lists for admission to hospital, and these have been reduced from 2,877 at the end of 1949 to 1,700 at the end of 1951. The downward trend in the waiting lists is not solely due to the additional beds which have been provided but is, I feel, a measure of the success of the work which has been undertaken by all the health authorities during recent years.
The hon. Gentleman has stated that, in addition to the beds which have been provided here at home, beds to the number of 180 have been provided in sanatoria in Switzerland. That innovation commenced in June, 1951, when the first 36 patients were flown out, and they have been succeeded by other groups in subsequent months. The first group is due to return to this country in March of this year, and I understand that the great majority of them will be fit to be discharged to their own homes. I wish to say about the treatment in Switzerland that the medical advisers of the Department of Health are fully satisfied with both the treatment and the care which these patients have received and the progress that they have made.
I indicated while I was in process of giving the increase in the number of staffed beds that recruitment of tuberculosis nurses has been fairly successful. The increase last year was 138, and the total number of tuberculosis nurses that we now have is 1,587. However, I want to warn the House that in future there may be some difficulty in maintaining that level, for we are given to understand that during the next 10 years the number of women between 18 and 30 years of age will decline very considerably, and that means that there will be fewer young women to take up nursing. That emphasises the importance of endeavouring to recruit tuberculosis nurses from the general hospitals, where the staffing position is somewhat better. The regional hospital boards have been invited to encourage the secondment of such nurses, and I am glad to say that some have already volunteered.
The hon. Gentleman asked about the fear of infection. I should like to reiterate what has been said in previous debates on this subject. The Department of Health believe that nurses working in sanatoria, under suitable precautions, suffer no greater risks than nurses working in general hospitals.
The hon. Gentleman also referred to the matter of after-care. It may be that this is a matter which has not received very great publicity, but the local authorities are required to make provision, after discharge from hospital, for the care of tuberculosis patients, including visitation and the provision of extra nourishment and comfort where these are necessary. The authorities also have the duty of keeping in touch with the officers of the Ministry of Labour in relation to questions both of resettlement and of training for new occupations. I most heartily agree with the hon. Member when he stresses the great importance of these two matters.

Mr. James McInnes: I appreciate the desire of the hon. and gallant Gentleman to encourage this campaign in every way, but why have regional hospital boards been encouraged to put a complete embargo upon the building of outdoor clinics for T.B. patients?

Commander Galbraith: The question of outdoor clinics is a technical one, on which I am not at the moment informed, but as the hon. Member will see, the number of beds is greatly increasing and more accommodation is being provided in that way.
I was asked also to say something about treatment in the homes. New drugs, such as streptomycin, have opened up the possibilities of treating patients in their homes—that is to say, where conditions are suitable. These patients would come under the active domiciliary scheme. Many would receive treatment during a short stay in hospital and thereafter would return home, attending a clinic from time to time. That scheme, of course, calls for the very closest co-operation between the tuberculosis physicians, the general practitioners and the local health authority, the latter being responsible for home nursing, the home help service, and the health visiting services.
The hon. Member asked about the possibility of the extension of home treatment. At present, the manner and the place in which streptomycin injections are given varies throughout Scotland. Some are given in the home of the patient, either by a general practitioner or by a qualified nurse. Some are given in clinics where there is a specialist staff. Some local authorities prefer meantime to employ the latter method, believing that it ensures better supervision and enables, at the present stage of development, more patients to be treated.

Mr. MacPherson: Before the hon. and gallant Gentleman leaves the subject of home treatment, can he give any approximate indication of the number of cases being treated in that way? How does it compare with, for instance, the number being treated in sanatoria and hospitals?

Commander Galbraith: I have not got information on that point available to me, but certainly in Glasgow, as the hon. Member may know, a great many cases are being treated in clinics, more so, I think, than in patients' own homes. Indeed, as I understand it, the health authority in Glasgow believe that at present it is better to treat their patients in clinics.
New and improved methods of treatment have given T.B. patients an opportunity of recovery which has never before been possible. The discovery of streptomycin and its use in conjunction with other drugs, and, if necessary, in conjunction with accepted forms of surgical intervention, has radically improved the effectiveness of treatment, and never has the outlook of the patient been so favourable as it is today. Nevertheless, I should make this clear: that the contribution of the public health work of the local health authorities plays a most vital part in defeating tuberculosis.

It being Ten o'Clock, the Motion for the Adjournment of the House lapsed, without Question put.

Motion made, and Question proposed, "That this House do now adjourn."—[Mr. Vosper.]

Commander Galbraith: The final eradication of the disease is very greatly a matter of better nutrition, better environmental hygiene, better housing and more health education. Tuberculosis is still the major health problem in Scotland and, although the last three years have produced evidence of great progress in every field, we must press forward and continue to do so with every weapon that is available to us until the disease, which is said to be preventible, has been eradicated. While we have every reason to be hopeful, there is no room for complacency. It is the intention of the Government to do everything possible to speed the improvement which has recently been obtained.

Question put, and agreed to.

Adjourned accordingly at One Minute past Ten o'Clock.